Carbon Trading Is a False Solution for Climate Action. Here’s Why

It jeopardises vulnerable lands, lacks stability, fails to ensure real emission reductions, and perpetuates structural inequalities.

There is an African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” At least, this is the wisdom that, according to climate scientists, lobbyists, and activists, applies to the global challenge of climate change, which requires collective action and cooperation among nations, especially between the rich and the poor.

It has been enshrined in the Sustainable Development Goals and many commitments, declarations and agreements on a global scale. Let us start by looking at some important commitments made by developed countries, especially about tackling climate change.

It includes the US$100 billion climate finance pledge, which was the commitment made by developed countries in 2009 to help developing countries cope with the impacts of climate change and transition to low-carbon development. 

However, this target has never been met, and the latest estimate by the Organisation for Economic Co-operation and Development (OECD) shows that only US$79.6 billion was mobilised in 2019, with President Samia Suluhu Hassan, speaking at the High-Level Segment for Heads of State during the United Nations Climate Summit (COP28) in Dubai, recalling this shortfall.

There are also some important pre-2020 commitments made by developed countries under the Kyoto Protocol and the Cancun Agreements to reduce their greenhouse gas emissions by 2020 compared to 1990 levels.


However, many of these countries have failed to meet their targets, and some have even increased their emissions over the period. The UN report on the global stocktake, which is a periodic review of the collective progress towards the goals of the Paris Agreement, has acknowledged that developed countries’ historical emissions have depleted the carbon budget and have failed to fulfil their pre-2020 commitments.

The 1.5°C temperature is the aspirational goal of the Paris Agreement to limit the global average temperature rise to 1.5°C above pre-industrial levels by the end of the century. However, the current national climate pledges, or nationally determined contributions (NDCs), are insufficient to achieve this goal and would lead to a warming of about 2.7°C by 2100. 

The Intergovernmental Panel on Climate Change (IPCC) has warned that every fraction of a degree of warming matters and that exceeding 1.5°C would have severe and irreversible consequences for people and ecosystems.

Another notable agreement on climate change is the coal phase-out, the commitment made by more than 40 countries and regions at COP26 to phase out coal power by 2030 for developed countries and by 2040 for developing countries.

READ MORECarbon Credits Trading: A New Form of Africa’s Colonialism?

However, this commitment does not include some of the world’s biggest coal users and producers, such as China, India, the United States, Australia, and Indonesia. Coal is the most carbon-intensive fossil fuel, accounting for about 40 per cent of global electricity generation and 30 per cent of global carbon dioxide emissions.

I have paused to examine whether these commitments were grounded in scientific evidence or motivated by political or economic interests. Because, surely, if they were based on the science that these measures would have slowed down climate change and ultimately helped to manage it, those in the global north, where most of the researchers and scientists come from, would at least show some concern and actually appear worried. 

According to the United Nations, citing scientific data, the impact of climate change will be irreversible by 2030. The dominant narrative in most of the leading economies and UN programming, commitments and agreements is global cooperation for development. 

A false solution

However, despite all the scientific recommendations to mitigate and ultimately manage climate change, a new trend has emerged recently: Carbon Trading. I contend that this mechanism, which is supposed to foster cooperation, is actually a false solution that benefits the wealthy and powerful at the expense of the marginalised and vulnerable. 

Climate change is one of humanity’s most urgent and complex challenges; at least, that is what climate scientists, activists and lobbyists are telling those of us not hailing from the scientific community. It threatens the lives and livelihoods of millions of people, especially in the Global South, who are already suffering from poverty, inequality, and environmental degradation, so they say.

READ MOREAfrica Climate Summit 2023: Will Africa Have One Voice?

To address the climate crisis, and while it may not be sufficient, countries the world over have adopted various mechanisms to reduce greenhouse gas emissions and limit global warming, evidenced by much investment done through mechanisms such as the Sustainable Development Goals and other climate-related interventions and commitments. 

One of these mechanisms, which is rapidly being adopted globally, is carbon trading, which is also known as carbon emissions trading or cap-and-trade. The arrangement enables countries and companies to purchase carbon credits from less developed nations and sell permits to release carbon dioxide and other greenhouse gasses. 

It aims to create a market incentive for reducing emissions by assigning a value to carbon. Supporters of carbon trading argue that it is a fair and efficient way to achieve the objectives of the Paris Agreement, which seeks to limit the global temperature increase to well below 2°C above pre-industrial levels. 

However, a critical question remains: will the emitters be willing to stop the emissions if they can afford to buy carbon credits?

Recent reports highlight a surge in carbon trading deals across African nations, covering vast expanses of land leased to foreign entities by African governments. An alarming example is the United Arab Emirates-based company Blue Carbon, reserving a fifth of Zimbabwe, 10 per cent of Liberia, 10 per cent of Zambia and eight per cent of Tanzania, collectively amounting to an area the size of the United Kingdom.

READ MORENew Scramble for Africa: It Is Time for Africa-Africa Summit

In the Tanzanian context, this translates to eight per cent of the nation’s land reserved for actions, pollutants, and emissions originating from the Global North. The land becomes unavailable for local development due to stringent conditions accompanying carbon trading agreements.


Sadly, the agreements and contracts for these ‘land grabs’ in the name of carbon trading have been kept secret and disguised as investment schemes or environmental conservation programs. 

This leaves the citizens of the affected countries, whose land could have been used for projects that would improve their lives, in complete ignorance, not knowing how much their governments are making from these shady deals.

Carbon trading is not a fair or sustainable solution for climate justice and for the countries in the global South whose massive chunks of land must be preserved and conserved to create an illusion that some large corporations and emitters are doing something positive for the environment and the climate. 

In fact, it is a false solution that may perpetuate global inequalities, undermine environmental integrity, and delay systemic changes.

One of the main problems with carbon trading is that it creates a volatile market subject to fluctuations and uncertainties. The price of carbon depends on the supply and demand of emission permits, which various factors, such as economic conditions, political decisions, and weather events, can influence. 

For example, the COVID-19 pandemic caused a sharp drop in carbon prices, as the lockdown measures reduced economic activity and emissions. This means that carbon trading does not provide a stable and predictable incentive for reducing emissions and may even create opportunities for speculation and manipulation.

Moreover, carbon trading does not guarantee that the emission reductions achieved by the market are sufficient to meet the scientific targets of limiting global warming. The effectiveness of carbon trading depends on the stringency of the cap or the total amount of emission permits available in the market. 

However, setting the cap is a political process often influenced by lobbying and bargaining rather than scientific evidence. As a result, the cap may be set too high, allowing too many emissions or too low, creating scarcity and high prices. 

Either way, carbon trading fails to deliver the optimal emission reductions needed for climate justice.

Another criticism of carbon trading is that it does not ensure the emission reductions are real, additional, and permanent. Carbon trading allows countries and companies to offset their emissions by buying credits from projects or programs that claim to reduce or avoid emissions elsewhere. 

READ MOREREDD+ and Local Communities’ Welfare in Tanzania: Past Lessons and Current Trends

For example, a coal-fired power plant in Europe can continue to emit carbon dioxide by purchasing credits from a national park in Tanzania. However, this does not necessarily mean that the national park would not continue to exist in pristine condition without the carbon credits. 

In other words, carbon trading may create loopholes and incentives for greenwashing rather than for genuine emission reductions.

Root causes ignored

Furthermore, carbon trading does not address the root causes of the climate crisis, which are related to the unsustainable patterns of production and consumption that are driven by the global capitalist system. Carbon trading allows countries and companies to continue to emit greenhouse gasses as long as they can pay for it. 

This means that carbon trading does not challenge the structural inequalities and injustices that underlie the climate crisis but rather reinforces them. Carbon trading shifts the burden of emission reductions from the rich to the poor, from the North to the South, and from the present to the future.

Another challenge of carbon trading is that it may enable and legitimise corporate greenwashing, which is the practice of giving a false or misleading impression of environmental responsibility. 

Carbon trading allows companies to claim they are taking action on climate change while profiting from polluting activities. For example, oil and gas companies can invest in carbon offset projects, such as tree planting or renewable energy, and use them to offset their emissions from fossil fuel extraction and combustion. 

However, this does not address the fact that fossil fuels are the main source of greenhouse gas emissions and need to be phased out as soon as possible.

It is, therefore, my view that carbon trading proves to be a flawed and inadequate solution for climate justice. It jeopardises vulnerable lands, lacks stability, fails to ensure real emission reductions, and perpetuates structural inequalities. 

READ MOREThe Nairobi Declaration on Climate Change: Some Take-home Message for Tanzania

As nations strive for sustainable solutions to climate change, it is important for a global community to explore alternative and real approaches rooted in solidarity, cooperation, and transformative change. 

In the Tanzanian context, where eight per cent of our land is earmarked for carbon trading, and we may see more of such deals, the imperative for a just and sustainable approach is particularly pressing. 

Collaborative, equitable, and science-based strategies are more than important to address climate change while safeguarding the interests of our people and our economic and national security interests. 

Kennedy Mmari is the Founder and Chief Executive Officer of Serengeti Bytes, a Dar es Salaam-based communications, public relations and digital media agency. He’s available at [email protected] and on X as @KennedyMmari. The opinions expressed here are the writer’s own and do not necessarily reflect those of The Chanzo. If you are interested in publishing in this space, please contact our editors at [email protected]


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