Liberia Enters Carbon Market

The Liberian Environmental Protection Agency (EPA) is leading the country’s entry into the carbon market, aiming to sell carbon credits to companies and individuals seeking to offset their emissions.

Dr. Emmanuel Yarpolowo, EPA Executive Director, said that this effort, spearheaded by the National Climate Change Steering Committee (NCCSC), will be guided by robust policies and laws to ensure Liberia can safely leverage these opportunities and prevent fraud or exploitation.

“You can’t sell if you don’t know what you have,” he said at a one-day stakeholdersmeeting in March. “You will be cheated, and you know we have been cheated in the mineral sector. We have been cheated badly. How can an investor come, and you say go find the mineral?” he explained. “So, we don’t want to make that mistake with the forest resources or relating to carbon.”

Liberia has signed a letter of Engagement with the Coalition for Rainforest Nations (CfRN) to support its entry into the carbon market. Subsequently, the recruitment of a consultant to develop a carbon policy has been announced. The consultant will work to assess the country’s readiness, potential, and capacity for generating and trading carbon credits transparently, accountably, and equitably, with a focus on reviewing existing laws and policies concerning climate change and resource ownership.

The carbon market policy development followed a widely criticized agreement signed with Blue Carbon to grant rights to over one million hectares of forest. In response, the EPA announced a halt to all carbon market activities, emphasizing the need for a law to define ownership, rights, and trading mechanisms.

Liberia’s vast forest provides the country with the potential to enter the carbon market, generating revenue by selling carbon credits to industrialized nations such as China, the U.S., and the United Arab Emirates. These countries emit significant amounts of greenhouse gases compared to Liberia, which contributes 0.03% of global greenhouse gas (GHG) emissions, but lacks the financial resources to support climate adaptation, mitigation, the Nationally Determined Contribution (NDC), and the National Adaptation Plan.

The carbon market deals with the sales of carbon credits generated from reducing emissions. The primary goal is to reduce greenhouse gas emissions by creating incentives for countries, companies, wealthier nations, and organizations to lower their emissions through projects such as planting trees, electric cars, and clean cookstoves. Compliance and Voluntary are the two main types of carbon markets. The compliance market mandates individuals or companies to participate in response to an obligation established by a regulating body. In a voluntary market, participants are under no obligation to achieve specific targets. Instead, it allows non-state actors such as companies, cities, or regions to willingly offset their emissions.

The 2021 emissions gap report says the carbon market could help to slash emissions; however, rules must be strictly set with clear targets that ensure transparency. The carbon market supports countries to fund their nationally determined contributions (NDC). Money regenerated from the sales of credits can go towards projects and initiatives that reduce dependence on fossil fuels, goals, and gases that emit greenhouse gas emissions.

It is estimated that trading in carbon credits could reduce the cost of implementing countries’ NDCs by more than half, by as much as $250 billion in 2030. Carbon trading has been identified as a tool to remove 50% of emissions (about 5 gigatons of carbon dioxide per year by 2030) at no additional cost.

The 2018 Land Rights Law in Liberia grants communities ownership of forests located on their Customary Land. Consequently, these communities have the right to manage and utilize the land and its resources. However, this excludes minerals, as the 2000 Mineral and Mining Law stipulates that all mineral resources, including iron ore, gold, and diamonds, are owned by the government. While the government can establish Protected Areas within forests for conservation purposes, these areas are often managed through collaborative efforts involving the community and with government support.

Civil society organizations and advocates have raised concerns about ensuring community ownership and rights are fully respected and protected as Liberia develops plans to participate in the carbon market, aiming to prevent communities from being marginalized in these new initiatives.

Already, there is a push back between communities and concession companies for the 30 percent land rental fees that they are entitled to. Andrew Zelemen, head of secretariat/national facilitator, National Union of Community Forestry Development Committees (NUCFDC), is urging the government to consider carbon as a “commodity” and not a resource. He said this will allow communities who are owners of the forest to own the carbon credit that they can sell themselves.

“Carbon should be treated as a commodity, not a mineral resource,” he said in a WhatsApp call interview. “And if it is treated as commodit,y then everywhere it is found that those who own that portion of the area will have the right over the commodity.”

Referencing the 2018 Land Right Law, Zelemen said “On that basis if customary land is own by communities’ whatever quantities of the carbon that is being harvested in that part of the area will be owned by those customary land communities.”

Forests in Liberia are a lifeline for communities, providing food, jobs, and income for communities. From hunting, farming, and charcoal production, forests have been a source of livelihood for 60 percent wholived within 2.5 kilometers of the forest that covers 6.69 million hectares of trees, according toWorld Bank 2020 People and Forests Interface — Contribution of Liberia’s Forests to Household Incomes, Subsistence, and Resilience report.

These forests, which provide livelihood for communities, would be conserved, preventing people from using it to farm, hunt, and conduct other activities that supported their livelihoods, in favor of carbon credits.

In an email, Saskia Ozinga, founder, Fern, said it would be a hard thing to put local communities at the heart of carbon credit schemes, particularly when it comes to revenue sharing and income generation because “among all carbon offset projects there are at the most a handful where communities really got some real benefits.” According to him, carbon trading delivers most to the traders and middlemen by the nature of how it works.

Ozinga foresees serious risks for Liberia including getting into debt to forest destruction, to expelling communities from their land.

While the EPA is still developing policies and regulations on carbon trading, the Mount Coffee hydropower has already been registered as a project under the Global Carbon Council (GCC) Voluntary Carbon Market program, with the aim to reduce 120,600 tons of carbon emissions per year. This deal was done without the involvement of the EPA as the lead institution on carbon issues in the country.

AERA, a Paris-based carbon credit firm, is the carbon credits buyer for Mount Coffee hydro power plant (88 MW) in Liberia. The Cost of this project is still unknown. Both the Liberia Electricity Corporation, legal project owner, AERA andHydro Operation International SA, a Swiss-based, privately owned company, co-owners have not disclosed the agreement between them on this project. Aera Group has raised US$31.6M. AERA hasactive projects in Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Rwanda, Seychelles, Somalia, South Sudan, Tanzania, Uganda, Zambia, Zimbabwe, Angola, Cameroon, Central, African Republic Chad, Congo -Brazzaville Congo – Kinshasa, Equatorial Guinea, Gabon, São Tomé & Príncipe, Algeria, Egypt, Libya, Morocco, Sudan, Tunisia, Botswana, Lesotho, Namibia, South Africa, Eswatini, Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria and Senegal.

The registration of the mount coffee hydropower has raised some concerns among civil society groups, as well as government ministries whose activities involve renewable energy or carbon credit leadership and ownership, considering that the Liberia Forestry Development Authority (FDA) manages all forest issues in Liberia, the Liberia Rural and Renewable Energy Agency (RREA) is into the installation and construction of solar and mini-hydroelectric power, and the Liberia Land Authority, which manages land matters.

According to Ozinga, FERN founder, it would be critical for these institutions and the Ministry of Justice to be all involved and jointly make decisions on carbon issues in Liberia. “We saw with the Blue Carbon deal that this was not the case and that was a problem.”

By Liberian Observer.