What are carbon credits? ... As Zimbabwe signs $1.5 billion deal with Dubai firm to sell carbon credits from forest conservation

TAKUDZWA HILLARY CHIWANZA

Zimbabwe has entered into a partnership with a Dubai-based company, Blue Carbon, to generate carbon credits from about 20% of its land area, in a deal that could bring $1.5 billion of climate finance into the country.

Carbon credits deal ... Blue Carbon gets project rights over 7.5m hectares of Zimbabwean forest

The memorandum of understanding—announced on Friday in Harare by President Emmerson Mnangagwa and Sheikh Ahmed Dalmook Al Maktoum, the chairman of Blue Carbon and a member of the Dubai royal family—aims to preserve forests and restore degraded lands in exchange for carbon credits that can be sold on the global markets.

Carbon credits are certificates that represent a reduction of greenhouse gas emissions.

They can be bought by companies and governments that want to offset their own emissions and achieve net-zero targets. 

Blue Carbon is one of the largest carbon credit companies in the world, with projects in Africa, Asia and Latin America.

According to the agreement, Blue Carbon will develop and manage projects covering 7.5 million hectares of Zimbabwe's landmass, involving reforestation, forest conservation and community engagement. 

The company will also provide technical and financial support to the Zimbabwean government and local communities.

Sheikh Al Maktoum said the deal "symbolises a powerful alliance between Zimbabwe and UAE in the face of a shared global challenge". 

He added that the project will bring hundreds of millions of dollars to the Zimbabwean government and that a large portion of the revenue will be spent on the local population.

President Mnangagwa said the deal will help Zimbabwe achieve its national climate goals and enhance its natural capital. He said the partnership will also create jobs, improve livelihoods and promote sustainable development.

What are carbon credits?

Carbon credits are a form of environmental currency that represent a reduction of greenhouse gas emissions. 

They are issued by projects that prevent, reduce or remove carbon dioxide (CO2) from the atmosphere, such as forest conservation, renewable energy or energy efficiency. 

One carbon credit is equivalent to one tonne of CO2 avoided.

Carbon credits and carbon markets are part of national and international efforts to mitigate the growth in greenhouse gas concentrations. 

They were devised as a mechanism to implement the Kyoto Protocol, an international agreement that aims to limit global warming to 2°C above pre-industrial levels by 2050. 

Carbon credits create a monetary incentive for companies and countries to reduce their carbon emissions. 

Those that cannot easily reduce emissions can still operate, at a higher financial cost, by buying carbon credits from those that can. 

Carbon credits are also seen as a way to finance low-carbon development in developing countries and to support the conservation of natural resources and biodiversity.

Concerns about Zimbabwe's deal with Blue Carbon

The deal has also raised some concerns about the transparency and accountability of carbon credit projects in Zimbabwe. 

Earlier this year, a report by Follow the Money, an investigative journalism platform, exposed abuses and irregularities in the Kariba project, one of the largest forest protection projects in the world, run by a Swiss company called South Pole. 

The report claimed that South Pole could not show that the money from the sale of carbon credits actually benefited the local communities or the environment.

In response to the report, Zimbabwe cancelled all carbon credit projects in the country and demanded a greater share of earnings from them. 

It later revised its position, allowing companies to keep 70% of the income, with the remainder going to locals.

With information from Newzwire.