The government is set to introduce the Climate Change (Carbon Markets) Regulations 2023, which will offer guidelines for traders dealing in the carbon market.
Carbon market is a trading system where individuals sell and buy carbon credits. Carbon credits are permits that allow the owner to emit specified amounts of carbon dioxide in the air.
During carbon markets, low-emitting countries sell carbon credits to high-emitting countries to balance out gas emissions in the atmosphere.
If the draft regulations are passed, carbon market projects shall be required to undergo environmental and social impacts assessment conducted by the Environmental Management and Coordination Act and its Regulations.
The draft regulations created by the Environment Cabinet Secretary Soipan Tuya include a Ksh500 million fine, 10 years imprisonment, or both for those operating without licenses in Kenya.
It is part of the government's plan to deal with the effects of Climate Change and sell carbon credits.
"Any person who undertakes a carbon market project without an international, national, bilateral and project-based agreement without the approval of the Cabinet Secretary commits an offence," reads part of the regulations.
The regulations apply to carbon markets concerning anything done in, on, above, or below the land and airspace of Kenya. It will regulate the carbon market and provide a framework for credit projects and programs.
All individuals seeking to participate will be required to apply for licensing from the Designated National Authority (DNA) established by the regulations. Applicants will be required to pay a fee as prescribed.
All participants shall apply corresponding adjustments to ensure that there is no increase in net emissions.
Besides the DNA, other institutions established if the regulation is implemented include the Sector of Carbon Registries, the National Carbon Registry, the Carbon Assessment Technical Committee, and the Climate Change Directorate. All these bodies will work to offer guidelines in the sector.
Meanwhile, under the regulations, the CS is allowed to trade carbons for internationally transferred mitigation outcomes.
"The Cabinet Secretary may, with the approval of the Cabinet, enter into agreements on carbon markets established or overseen by an
internationally recognized entity, approved by a recognized credible international body," reads part of the regulations.
