Ethiopia has been actively engaged in reforestation and afforestation efforts to increase its forest cover and reducing toxic gases. After the reform, Ethiopia planted more than 31 billion plants in the green legacy project. This initiative implies combating deforestation and promoting reforestation across the country. It provides to protect biodiversity and essential ecosystem services such as water regulation, soil conservation, and climate regulation. These services contribute to agricultural productivity, water availability, ensuring food security, and overall environmental sustainability, which are vital for the country’s economy.
And also, it is encouraging ecotourism and wildlife conservation. Such tourism activities can generate revenue, create employment, and stimulate local economies. Moreover, it can help to reduce its greenhouse gas emissions, potentially contributing to international climate change commitments. Despite the fact that Green Legacy primarily focuses on environmental conservation, it also has indirect implications for the Ethiopian economy growth.
Ethiopia recognizes the importance of addressing climate change and has taken significant steps to reduce its carbon emission. As a developing country with a rapidly growing economy and committed to sustainable development while minimizing the negative impact on the environment.
Not only does it reduce the negative impact of climate change on the environment, but it also generates revenue from carbon trading that can be reinvested in sustainable development projects such as further expanding renewable energy infrastructure, improving agricultural practices, and supporting local communities affected by climate change.
These initiatives assist in the production of carbon credits that are exchangeable on global marketplaces. The practice of purchasing and selling carbon credits as part of Ethiopia’s attempts to reduce greenhouse gas emissions and fight climate change due to carbon trade. In order to lower total emissions of carbon dioxide and other greenhouse gases, countries or organizations can exchange emissions permits through the use of carbon trading, a market-based strategy.
These initiatives involve the creation and exchange of carbon credits, which represent the reduction or removal of one metric ton of carbon dioxide or its equivalent greenhouse gases from the atmosphere. These credits can be bought and sold by organizations or governments on the carbon market.
Ethiopia has been able to generate revenue from its carbon appropriation efforts through a number of collaborations and initiatives. A prominent initiative that offers financial incentives to nations that effectively decrease deforestation and forest degradation is the Reducing Emissions from Deforestation and Forest Degradation (REDD+) program. Ethiopia has achieved significant strides in REDD+ project implementation, drawing in foreign money and earning income from carbon credits.
Yitebtu Moges (PhD), the coordinator of the National Red Plus Program under Ethiopian Forest Development, said in the Ethiopian Herald that this financial reward recognizes the significant efforts made by Ethiopia to protect and enhance its forest cover, which effectively reduces carbon emissions. Ethiopia’s commitment to the forestry industry is projected to yield more than 100 million USD in revenue from carbon sales by 2030, he said.
He stated that carbon trading is a long-term endeavor influenced by market conditions. Presently, Ethiopia is selling carbon credits to the World Bank; the payment received is determined by the quantity and size of the forest, measured in tons of carbon content. This not only ensures the preservation of ecosystems but also maintains climate balance.
As to him, over the past decade, Ethiopia has generated 150 million USD in revenue through various activities, with support from the World Bank and Norway. And he also mentioned the collaborative efforts with foreign assistance and the recent agreement with the World Bank, which will contribute 40 million euros for forest maintenance in the Oromia region.
The revenue generated from carbon trade has several benefits for the nation. Such as, it serves as a financial incentive for the preservation and sustainable management of its forests, contributing to biodiversity conservation and safeguarding ecosystem services. And also, it can be reinvested in renewable energy projects, climate adaptation measures, and community development programs, fostering sustainable economic growth and poverty reduction.
Ethiopia’s carbon trade activities are primarily focused on sectors such as renewable energy, reforestation, and sustainable land use practices. The country has abundant renewable energy resources, including hydropower, wind, and solar energy, which it seeks to harness and promote. By investing in renewable energy projects, Ethiopia aims to reduce its reliance on fossil fuels and decrease carbon emissions.
This projects involving carbon trading frequently call for large upfront investments, and obtaining funding can be quite difficult. Access to financing is a major obstacle to the development of carbon projects and related infrastructure, both domestically and internationally.
Ethiopia also has difficulties building a strong institutional and legal foundation to support carbon trading programs. The implementation and monitoring of carbon projects are complicated by a lack of clear policies, legal frameworks, technical expertise, project management skills, and standardized methodologies for measuring and verifying emissions reductions. Limited awareness and understanding of carbon trading mechanisms is another issue.
Ethiopia’s commendable work in the forestry industry not only contributes to global climate goals but also creates significant economic opportunities for the nation. By safeguarding its forests and engaging in carbon trading, the country has the ability to dominate the market and generate billions of dollars annually from the carbon trading sector, he added.
He further noted that one million hectares of forest in the Southwest Ethiopia People’s Region are being conserved and managed, with assistance provided to the local population. This large-scale initiative aims to enhance income opportunities while prioritizing sustainable forest management practices.
Additionally, Ethiopia’s commitment to climate action and sustainable development has positioned it as an attractive partner for international collaborations in carbon trading, further enhancing its revenue-generating potential.
He remarked on the significance of expanding the national-level Green Legacy Program and that the government should allocate additional resources to support the sector, considering the substantial economic potential it holds.
He suggested the establishment of a national carbon center, bringing together domestic and international experts, to help Ethiopia fulfill its commitment to reducing carbon emissions as outlined in the Paris Agreement.
Besides, international organizations involved in climate change mitigation and carbon trading, academic institutions, research organizations, and think tanks focusing on climate change and sustainable development may conduct studies and publish reports on carbon trading and revenue generation.
The Ethiopian government, the private sector, and foreign allies must work together to address these issues. In order to develop an environment that supports carbon trading in the nation, it entails increasing awareness, developing institutional capacity, enhancing data collection and management systems, facilitating access to financing, and streamlining regulatory procedures.
BY FIKADU BELAY
THE ETHIOPIAN HERALD TUESDAY 31 OCTOBER 2023
