Kenya is one of Africa’s largest sources of carbon credits. The Kenya Private Sector Alliance has estimated that the country accounts for about a fifth of all credits issued on the continent, from forest and rangeland projects to clean cookstoves. For years, communities living alongside those projects asked a simple question: how much of the money reaches us? Kenya has now written an answer into law.
What the law requires
The Climate Change (Amendment) Act of 2023 introduced rules for carbon markets, and the Climate Change (Carbon Markets) Regulations, 2024, gazetted on 17 May 2024, put them into effect. Projects on public or community land must make an annual social contribution:
- Land-based projects, such as forest conservation or rangeland management, must contribute at least 40% of the previous year’s aggregate earnings to the community.
- Non-land-based projects, such as cookstoves, must contribute at least 25%, paid into the national Climate Change Fund.
The regulations clarify that the contribution is calculated after deducting the cost of doing business. Private projects on private land are not required to pay it.
How the money is managed
For land-based projects on community land, the contribution is governed by a Community Development Agreement between the developer and the community, and managed by a community project development committee. Developers must also document free, prior and informed consent. Projects must start within 12 months of approval and are recorded in a national carbon registry overseen by the Designated National Authority.
Where disputes are likely
- Costs. Because the 40% applies after the cost of doing business, the definition of costs will determine how much communities receive. Without clear rules, it is an obvious source of conflict.
- Representation. Who speaks for a community, and how are women, youth and minority groups included in decisions about spending?
- Transparency. Communities need to know how many credits were sold and at what price to judge whether they received their share.
What would build trust
The simplest step would be to publish, project by project, the credits issued, revenues earned, costs deducted and contributions paid, through the national registry. Independent audits and accessible grievance mechanisms would add credibility. For buyers worried about the integrity of credits, transparent benefit sharing is becoming part of the product. For communities, it is the difference between a project done with them and one done to them.
Sources: Oraro & Company: The Carbon Markets Regulations, 2024 · EY: Kenya publishes Carbon Markets Regulations · Afriwise: Key highlights of the regulations · Nation: Unpacking Kenya’s carbon market regulations
