Tawanda Musarurwa
Zimbabwe’s agro-industrial sector is sitting on a goldmine in the form of carbon credits.
The country is said to be the world’s 12th largest producer of carbon credits, having generated 4,2 million credits from 30 registered projects in 2022.
But there is scope for more.
The global market for carbon offsets is growing.
According to carboncredits.com, “forecasts place the value of the sector between US$10 billion to US$25 billion by 2030, depending on how aggressively countries around the world pursue their climate change targets.”
And last December, the World Bank announced plans for the development of high-integrity global carbon markets, with 15 countries lined up to earn income from the sale of carbon credits generated from preserving their forests.
With key agro-industries like tobacco, sugar and horticulture already playing a pivotal role in the Zimbabwean economy, shifting towards sustainable practices can unlock new revenue streams, while reducing greenhouse gas emissions.
The opportunity lies in turning sustainable practices into new revenue streams, while cutting emissions and boosting the country’s international standing.
The potential of carbon credits
For the country, the global carbon credits market is a largely untapped resource.
Green entrepreneur Dr Nozipo Maraire believes there is scope for better leverage.
“A lot of countries in the West, and also in the Middle East, are required to have net-zero emissions by a certain date, let’s say 2030, which means they can still produce CO2 (carbon dioxide), but then they have to offset it.
“So, there is a big market for carbon credits. It is actually an asset class. We can do it through forestry, through renewable energy; there is a number of ways you can get carbon credits and then trade them,” she told the Zimbabwe Association of Pension Funds (ZAPF) 49th annual conference in May.
“It’s an incredible asset, because you do not have to do that much. You just have to make sure that you preserve the forest, the natural resource or the biodiversity (because there is also biodiversity credits).
“We are missing out on carbon credits, because so much of what we do already generates carbon credits.”
The country can play an important role in the climate change fight.
While less industrialised countries like Zimbabwe are not big emitters of greenhouse gases, they are no strangers to the harsh effects of climate change.
According to the Zimbabwe Revised Nationally Determined Contribution (2021), the country is “a small net emitter by global standards, responsible for 0,07 percent (2,5 tonnes CO2 equivalent emissions per capita of global emissions. In comparison, the G20 are responsible for 78 percent of emissions.”
Nevertheless, climate change impacts are already being felt.
Frequent droughts and shifting weather patterns have taken a toll on Zimbabwe’s agricultural sector, which remains the backbone of the economy.
For instance, the 2023/2024 agricultural season was affected by the El Niño phenomenon, reducing agricultural output and revenue for many players.
The global carbon credits market offers a practical solution, where agro-industries can earn credits by adopting practices that reduce or capture emissions, and then sell these credits to international buyers seeking to offset their carbon footprint.
Take Tongaat Hulett for example, one of the country’s largest sugar producers.
With vast tracts of land under cultivation, the company could integrate agroforestry practices – planting trees among their sugarcane fields.
Not only would this sequester carbon, but it would also generate a steady stream of carbon credits, which Tongaat Hulett could sell on the global market.
The country’s tobacco sector is another important opportunity.
While tobacco is a major earner, bringing in US$1,2 billion in 2023, the industry is a significant contributor to deforestation.
The Tobacco Industry Marketing Board and the Zimbabwe Tobacco Association, could spearhead a move toward sustainable tobacco farming by promoting conservation agriculture.
Reduced tillage, cover cropping and reforestation efforts could help offset the industry’s environmental impact, while earning credits that can be sold to the highest bidder.
Making it work
The key to cashing in on carbon credits is having a reliable way to measure and verify carbon reductions.
By working with internationally recognised greenhouse gas crediting programmes such as the Verified Carbon Standard (VCS), Zimbabwe’s agro-industries can ensure that their credits are legitimate and, therefore, valuable on the global market.
Government’s role
The Government has a role to play.
To fully capitalise on the carbon credits market, the Government must play its part by creating incentives for agro-industries to participate.
Tax breaks, subsidies, or even legal and policy frameworks that support carbon-friendly practices can spur companies to shift towards sustainable farming.
Some progress has been achieved in this regard.
Last September, the Government promulgated Statutory Instrument 150 (Carbon Credits Trading (General) Regulations, 2023) to guide carbon credit trading in the country.
“These regulations are an integral step in legitimising carbon credit trading in Zimbabwe and also establishing a sound voluntary market for carbon credits, which does not only establish environmental projects that further economic sustainability policies, but also attracts regional and international investments into the country,” says legal expert Mr Nobert Phiri.
Section 5 of SI-150 of 2023, establishes a Designated National Authority, some of whose functions are to “(a) provide technical advice to the Minister on carbon credit trading projects; (b) prepare reports for the Minister in compliance with national and international reporting requirements; (c) promote, build capacity and raise awareness on carbon credit trading; (d) establish and maintain the Zimbabwe Carbon Credit Registry and link the registry to the Convention and regional registries; and (e) ensure that all carbon trading projects operating in Zimbabwe are registered.”
Factoring in the small players
Of course, adopting these practices is not cheap.
Smallholder farmers, who form the backbone of Zimbabwe’s agricultural sector, might struggle to afford the necessary technologies or training.
But climate finance – through green bonds, international climate funds or direct investment – could ease the burden.
Small-scale farming cooperatives can lead the way by demonstrating how small-scale farmers can participate in the carbon credits market.
To the extent that these projects can be successfully implemented, the country can build momentum by showcasing such success stories.
By proving the economic and environmental benefits of such projects, Zimbabwe can attract foreign investment and grow its presence on the carbon credits market.
The pathway to carbon credits success hinges on policy support, market access and capacity building.
By continued participation in global climate platforms, such as the United Nations (UN) Climate Change Conference meetings, Zimbabwe can stay up-to-date with the latest developments in carbon markets, ensuring it remains competitive.
With a clear strategy, Zimbabwe’s agro-industries can turn sustainability into profitability.
By leveraging the global carbon credits market, Zimbabwe has the potential to create a more resilient and sustainable agricultural sector.
ORIGINALLY PUBLISHED IN THE SUNDAY MAIL – https://www.heraldonline.co.zw/carbon-credits-zimbabwes-new-cash-crop/