Treasury says carbon credit key for generating revenue

Ministry of Finance and Economic Affairs says international carbon markets present a unique opportunity for Treasury to generate revenue to finance development programmes.

Addressing delegates during the launch of the Malawi Carbon Initiative at Lilongwe Botanic Gardens in Lilongwe on Friday, Secretary to the Treasury McDonald Mafuta-Mwale said carbon credits present a unique opportunity for investors to generate “significant returns that can be used to expand their business operations”.

“At the local level, we can use the initiative to drive the change agenda to optimise carbon markets’ potential for social and economic development,” he said.

Carbon credits are permits that allow the owner to emit a certain amount of carbon dioxide or other greenhouse gases.

The companies then buy carbon credits from countries that can remove carbon dioxide from their environment, according to www.investopedia.com.

The mechanism helps to limit carbon emissions to manageable levels.

Mwale, who is also Malawi Carbon Market Initiative chairperson, said the initiative’s steering unit has signed a memorandum of understanding with Kick Foundation of Switzerland to quantify carbon in Malawi and get certificates that will allow the country to trade carbon credits on the international market.

Speaking at the same event, President Lazarus Chakwera said the country’s forest reserves and land can generate at least $600 million (about K637 billion or 27 percent of estimated revenues in the 2023/24 National Budget.

Minister of Tourism, Wildlife and Culture Michael Usi urged prospective investors to acquire licences from his ministry to create a conducive environment for fair carbon trading.

He said licensing will help the government track the quantity of how much carbon is available and the revenues generated from the sale of carbon credits.

Civil Society Network on Climate Change national coordinator Julius Ng’oma commended the government for setting up a task force and a steering committee to guide the development of the carbon markets.

The Malawi Carbon Market Initiative is part of a broader framework by the African Carbon Markets Initiative to scale the market for carbon credits retired annually by 2030.