In Zimbabwe, carbon credits, a windfall coveted by the state

June 23, 2023

At dawn, Peter Mudenda sets off on the trail of elephants in this remote reserve in Zimbabwe, near Lake Kariba. But here, wildlife conservation coexists with the sale of carbon credits.

The 49-year-old former farmer hung up the pickaxes and the plow when this region in the north of the country embarked on a vast project to protect the forest: “I was making a good living,” he told AFP. ‘AFP, “but I quickly understood that there was more to draw from a protected zone”.

The Kariba project, which extends over 785,000 hectares of forest, has generated more than 100 million euros from the sale of carbon credits since 2011. Now part of this windfall, unexpected in a dying economy, risks land in the coffers of the State which wants to impose a levy of 50% of the income from carbon offset projects.

Carbon neutrality has become in recent years a global market on which companies and individuals can buy carbon credits from entities that eliminate or reduce their greenhouse gas emissions, by investing in particular in renewable energies, mangroves or even in planting trees.

In the reserve, the program born of a partnership between a local company (Carbon green investment, CGI) and a developer of carbon credits based in Switzerland (South Pole) includes in addition to the protection of trees, beekeeping and ecotourism, by involving local communities. Multinationals like Nestlé or even Gucci have invested.

One credit equals one tonne of CO2. And that booming market, now worth $2 billion, could reach $10 billion by 2030, according to a report released this year by oil giant Shell and the Boston Consulting Group (BCG).

But recent scandals have shown that the world of carbon credits remains a wild west opening up many possibilities for “greenwashing” or eco-bleaching, with certain companies wishing to appear “carbon neutral” being accused of not fulfilling their commitments or announced investments.

Many countries seek to regulate the sector where trade takes place directly between companies. A global trading system is also under discussion within the framework of climate negotiations under the aegis of the UN.

But in Zimbabwe, “the approach taken is quite radical,” said Gilles Dufrasne of Carbon Market Watch, a rights group.

The southern African country, plunged into a deep economic crisis for twenty years, announced in May that 50% of these revenues will have to be donated to the State.

At least another 20% must go to local investors, with foreign partners not allowed to pocket more than 30%.

In addition, carbon credit contracts will have to be submitted for government approval and existing agreements will be declared “null and void”.

However, no concrete regulations or timetable have yet been set.

But the announcement sowed uncertainty and frightened investors as well as the beneficiary communities of the project.

“The government must ensure that it comes up with favorable policies to prevent communities from reverting to a way of thinking where they do not attach importance to forest conservation,” said local elected official Elmon Mudenda.

Today 20% of the project’s revenue is dedicated to environmental protection. The rest is split between communities and landowners, according to South Pole.

“Speculation and political rhetoric create uncertainty (…) and will slow down or even stop investment,” fears the spokeswoman for South Pole.

For Mr. Dufrasne, a seizure of the State on these revenues also sows the suspicion on “what they will do with the money”.

With Zimbabwe’s bad “reputation” for being plagued by corruption and mismanagement, foreign companies may be reluctant to buy credits, fears CGI director Stephen Wentzel.