Rwanda has today launched its National Carbon Market Framework in a significant stride towards a greener and more sustainable future. The framework was launched on the sidelines of the UN Climate Change Conference (COP28) in Dubai, UAE at 2 December, 2023.
Rwanda has a bold vision to be climate resilient and carbon neutral by 2050. To achieve this ambitious goal, the Government of Rwanda has taken a groundbreaking step to establish a carbon market framework. This first ever carbon market framework underscores Rwanda’s commitment to combating climate change and fostering a sustainable future.
“As we embark on this transformative journey, we recognise the importance of collaboration, innovation, and shared responsibility in shaping a low-carbon economy. Together, we have the opportunity to drive positive change, foster green growth, and build a resilient environment,” said Dr. Jeanne d’Arc Mujawamariya, Minister of Environment.
The framework sets rules for the trading of carbon credits, encouraging businesses and industries to adopt cleaner practices and invest in sustainable technologies. The framework aims to help to increase the transparency and trust among the carbon traders.
“Bringing more of these carbon markets onto exchanges will enhance transparency and bring greater confidence to the carbon market, which extends to pricing mechanisms and the prevention of double counting,” Minister Mujawamariya added.
Carbon trading works by setting a limit on the total amount of greenhouse gas emissions a country can produce. Industries are then allocated emissions allowances, and those with excess allowances can sell them to those exceeding their own limits. This creates a financial incentive for businesses to reduce their carbon footprint.
Rwanda’s Carbon Market Framework was commissioned by the Rwanda Environment Management Authority (REMA), the carbon market regulator, with support from the United Nations Development Programme. The establishment of the framework demonstrates Rwanda’s commitment to achieve emission reduction targets set out in Rwanda’s NDC Climate Action Plan.
Rwanda will offer high quality carbon credits that will not only provide climate benefits, but also empower communities and protect and restore biodiversity.
In Rwanda’s updated NDC, Kabera pointed out, the government commits itself to reduce greenhouse gas emissions by 38 per cent through unconditional and conditional measures in agriculture, energy, waste, and industrial processes and product use; and will drive adaptation across eight sectors: water, agriculture, and forestry, human settlement, health, transport, mining, and cross-sectional.To deliver on these goals, the government has pledged to raise $11 billion ($5.7 billion for mitigation and $5.3 billion for adaptation measures) for full implementation of the NDC (by 2030).Kabera said that the government is committed to mobilising domestic financial resources of around $4.1 billion while the remaining $6.9 billion is required from the international community.To achieve its conditional target, Rwanda intends to use different climate finance sources including international carbon market mechanisms and cooperative approaches under Article 6 of the Paris Agreement.