Kenya is advancing efforts to develop voluntary carbon markets (VCM) as part of its climate mitigation strategy. At a recent high-level workshop in Nairobi convened by EfD Kenya, representatives from government, the private sector, and research institutions discussed how carbon markets could support both environmental and socio-economic goals.
Participants stressed that clear regulations, transparent benefit-sharing, inclusive governance, and strong public awareness must underpin the growth of carbon markets. Without these, the market’s long-term impact could be undermined. Current projects—from reforestation to clean energy—are already improving access to health care, clean water, education, and livelihoods, with particular benefits for rural women and children.
Addressing governance and capacity gaps
Discussions highlighted governance challenges, including overlapping mandates between national and county governments, unclear carbon ownership rights, and the absence of a national registry or operational Climate Change Council. Verification and monitoring weaknesses—such as over-crediting in some cookstove projects—were seen as threats to market credibility. Strengthening legal clarity, verification systems, and independent oversight was deemed essential.
Ensuring inclusion and local capacity
Stakeholders noted that local communities, including indigenous peoples and persons with disabilities, are often excluded from decision-making despite being directly affected by projects. They called for co-ownership models, robust consent processes, and capacity-building for both regulators and landowners to ensure benefits are understood and shared fairly.
Financing and the role of economic instruments
The discussion also turned to economic design. As one participant asked,” Should Kenya adopt a carbon tax or develop an emissions trading system (ETS)?”
Discussions revealed a preference for ETS. Participants also emphasized the need for economic tools to value natural resources and ecosystem services to better integrate environmental assets into national GDP and budget planning. Participants warned that “without clearer frameworks for carbon ownership and revenue sharing, the voluntary market risks becoming fragmented and opaque,” raising concerns about transparency in how carbon revenues are distributed between communities and developers.
Building a carbon market that works for all
Despite the challenges, the mood was one of optimism. Kenya is well-positioned to build a carbon market that is both economically viable and socially equitable—if it invests in inclusive governance, legal reform, and local capacity. One participant stressed that “carbon markets can only achieve their climate potential through coordinated efforts to address the existing structural challenges.” As global demand for high-integrity carbon credits grows, Kenya’s ability to balance environmental ambition with social safeguards will determine whether its carbon economy becomes a global model—or a missed opportunity. As the workshop host, Kenneth Kigundu concluded, “at the end of the workshop, it was clear in my mind that the carbon markets space in Kenya has a very bright future, with important implications in carbon revenues, jobs, improved infrastructure and economic empowerment, and the realization of the country’s NDC targets.”
By Hannah Ngugi