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Kenya: The road to COP27 – Actions towards a greener future for Kenya

3 November 2022
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Since the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, world leaders gather every year for the UN Climate Change Conference of Parties (COP) to assess the progress combating climate change. 

This year, heads of state, policy makers, civil society members, activists and other climate experts from around the world will gather in Sharm El-Sheikh in Egypt for the 27th annual summit, also known as COP27. COP27 seeks to build on the progress made by the parties in COP26 with a focus on the urgent need for climate finance to support developing countries scale up their climate adaptation efforts. 

Recent activities in Kenya

At COP26, held last year in Glasgow, countries signed the Glasgow Climate Pact and operationalised the Paris Rulebook committing to ambitious climate plans. Kenya committed to being a net zero emitting nation by 2050. Following these commitments, Kenya has made positive strides towards the net zero goals including:

  • Launch of the Kenya Carbon Emission Reduction Tool (KCERT 2050) – The KCERT 2050, launched this year, is a data driven policy-making tool that allows users to project emissions generated from various sectors and provide government departments with an opportunity to develop action plans and long-term energy strategies on emissions reductions. This tool will be instrumental in ensuring decisions made by policymakers are backed by data when planning the country’s low-carbon transition and climate mitigation approaches.
  • Increase in environmental projects and the development of the carbon credits markets – There has been an increase in high-impact environmental projects geared towards land restoration and sustainable land management practices. These projects, if successful, will transform the livelihoods of many communities, restore degraded areas, and may generate carbon credits. This has resulted in the rapid development of the Kenyan carbon contracting market, which seeks to incentivise sustainable climate friendly practices. 
  • Discussions to set up Kenya’s first carbon exchange – The Nairobi International Financial Centre (NIFC) (established pursuant to the NIFC Act, 2017) was launched on 4 July 2022 with the objectives of developing a predictable and efficient business environment aimed at encouraging domestic and foreign investors to contribute to sustainable economic growth and to promote green finance. As part of its initial actions, a collaboration agreement was signed between AirCarbon Exchange (ACX) – a Singapore-based global carbon exchange – the Nairobi Stock Exchange and the NIFC to develop the first carbon exchange within the East Africa region. If operationalised, the carbon exchange will provide a further impetus for the growth of climate finance in Kenya because it will provide a locally accessible marketplace for carbon offsets.
  • Tax incentives for carbon credit projects – Needless to say, the fight against climate change requires supportive financial laws and policies. To this end, the Finance Act, 2022, grants a corporate tax incentive to companies certified by the NIFC to operate a carbon market exchange or emission trading system at a rate of 15% for the first 10 years of its operation. It is expected that this tax incentive will further develop carbon trade in Kenya and attract investments in carbon markets.
  • Development of Kenya Private Sector Strategy on Climate Change Solutions (2022-2030) – Ahead of COP27, the Kenya Private Sector Alliance (KEPSA) has launched a strategy on climate change to guide the private sector in implementing climate change-oriented solutions towards a low carbon development pathway.
  • Development of the National REDD + Strategy, 2022, – This strategy outlines the country’s proposed approach for implementing the REDD+ programme by outlining inter alia strategic options that can be adopted to allow for inclusivity while reducing emissions from the forest sector, and specifying the roles of the key stakeholders to implement those strategic options. 
  • Government pronouncements – the newly elected Government has environment and climate change as a key commitment in its manifesto. Some of the pledges and most recent pronouncements made by the President (which if actualised may have a significant impact in Kenya’s climate change policy and regulation) include:
    • increase of tree cover to more than 30% by 2032 and growing of 5 billion trees in the next five years;
    • rehabilitation and restoration of all degraded water towers and other forest ecosystems; and
    • inauguration of the Climate Change Council (Council) established under the Climate Change Act, 2016 (CCA), to steer Kenya’s climate action through stakeholder engagement. The Council is chaired by the President and mandated with the responsibility of providing an overarching national climate change coordination mechanism including setting targets for the regulation of greenhouse gas emissions and providing policy direction on climate change. 

What to expect at COP27

The agenda of COP27 centres on the same themes as COP26, namely: mitigation, adaptation, finance and collaboration. However, with the catastrophic climate events witnessed this year, ranging from frequent flooding in countries like Pakistan and Nigeria to worsening drought in Kenya, a proactive and concerted effort globally will be necessary to realistically address climate change concerns and environmental challenges. 

Stakeholders will take a keen interest in COP27 and the commitments, pledges and actions that will be taken towards decarbonisation efforts at the conference.  With Africa facing the adverse impacts and remaining significantly exposed to climate change, finance for loss, damage and mitigation will be on the spotlight. African heads of states and governments under the Committee of African Heads of State and Government on Climate Change (CAHOSCC) are expected to champion an African position on the fulfilment and implementation of pledges, adaptation funding and resource sharing. 

All stakeholders will wait to see how COP27 will impact policy and regulation across various jurisdictions. Bowmans will continue to keep an eye and update you on Kenya’s commitments in this regard.