Carbon trading in Africa

The report argues that carbon trading is an ineffective and often corrupt mechanism for addressing climate change in Africa. It examines the Clean Development Mechanism (CDM) and voluntary markets, finding that they frequently favor large industrial polluters over sustainable development and marginalize local communities. Through case studies in South Africa, Uganda, and Ethiopia, the authors illustrate how 'additionality' is often fabricated and how projects can lead to land grabs or the subsidization of fossil fuel expansion. The document concludes that the carbon market is structurally flawed and should be abolished in favor of direct public funding and low-carbon development pathways based on historical responsibility.

• Africa is significantly marginalized in the global carbon market; only about 2 per cent of officially registered Clean Development Mechanism (CDM) projects are located in Africa, and this drops to 0.6 per cent if South Africa and North African countries are excluded.
• The CDM often creates perverse incentives by rewarding companies for activities that are already illegal or part of business-as-usual operations. In the Niger Delta, projects claiming to stop gas flaring are essentially subsidizing fossil fuel exploitation, as gas flaring had already been judged illegal by the Nigerian High Court.
• Carbon trading frequently fails to support genuine sustainable development, often favoring 'low-hanging fruit'—projects that are cheap and easy to calculate—rather than those that promote long-term low-carbon development or benefit the poor.
• The concept of 'additionality'—the requirement that a project's emission reductions would not have occurred without carbon finance—is described as a 'meaningless concept' and a form of 'sanctioned story-telling' because counterfactual baselines are impossible to verify scientifically.
• In South Africa, the petrochemical giant Sasol has used the CDM to profit from emissions reductions while simultaneously expanding highly polluting coal-to-liquids (CTL) refining, which produces 1.8 to 2.5 times more emissions than conventional refining.
• Reforestation projects in Uganda, such as the Nile Basin Reforestation Project, have been linked to the displacement of local communities and the loss of grazing lands, prioritizing external commercial interests over traditional land rights.
• Voluntary offset markets, such as a pilot cookstove project in Ethiopia, lack the regulatory oversight of the CDM, making them prone to 'greenwash' and claims of emission reductions that are not verified by independent third parties.
• The World Bank's carbon finance activities are criticized for a lack of transparency and a conflict of interest, as the Bank continues to finance fossil fuel projects while simultaneously brokering carbon offsets to mitigate those same emissions.
• The Reducing Emissions from Deforestation and Forest Degradation (REDD) mechanism is criticized for potentially rewarding countries that have historically deforested more rapidly and for risking the dispossession of indigenous peoples who lack formal land titles.
• The carbon market is characterized by a 'revolving door' syndrome, where individuals move between roles as regulators, consultants, and traders, leading to systemic conflicts of interest that normalize the manipulation of the system for private gain.

APA

Reddy, T. (2011). Carbon trading in Africa. Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/Mono184.pdf

Chicago

Reddy, Trusha. Carbon trading in Africa. Institute for Security Studies, 2011. https://issafrica.s3.amazonaws.com/site/uploads/Mono184.pdf.

Wikipedia

{{cite report |last1=Reddy |first1=Trusha |title=Carbon trading in Africa |publisher=Institute for Security Studies |date=2011 |url=https://issafrica.s3.amazonaws.com/site/uploads/Mono184.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{reddy2011carbon, author = {Reddy, Trusha}, title = {{Carbon trading in Africa}}, institution = {Institute for Security Studies}, year = {2011}, url = {https://issafrica.s3.amazonaws.com/site/uploads/Mono184.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }