On 18 July 2023, Kenya's Cabinet considered the proposed Climate Change (Amendment) Bill, 2023 which seeks to provide a framework for Kenya's participation in domestic and international carbon markets. This is in pursuance of Kenya's obligations under the Paris Agreement.

Kenya has explicitly expressed its intention to use voluntary cooperation under Article 6 of the Paris Agreement, when applicable. Accordingly, Kenya has committed to developing domestic legislation and institutional frameworks to govern its engagement in the carbon market and non-market mechanisms.

The purpose of the proposed Climate Change (Amendment) Bill, 2023 is to foster:

  • development, management, implementation and regulation of mechanisms to enhance climate change resilience and low carbon development for the sustainable development of Kenya;
  • guidance in the development and implementation of carbon markets and non-market approaches in compliance with international obligations;
  • guidance and policy direction on carbon markets to the national and county governments, the public and other stakeholders; and
  • development of benefit-sharing mechanisms in carbon markets;

Notable changes under the proposed Climate Change (Amendment) Bill, 2023 include:

  • the establishment of a National Carbon Registry;
  • regulation of the creation and trade in carbon credits;
  • mandatory environmental and social impact assessment under the Environmental Management and Co-ordination Act, 1999 for each carbon trading project;
  • introduction of community development agreements which shall outline the relationship and obligations of the proponents of the project with impacted communities in carbon trading projects. Such community development agreements are required to provide, inter alia:
    • for the provision of an annual social contribution of at least 25% of the aggregate earnings of the previous year to the community, to be managed and disbursed for the benefit of the community;
    • for sharing of the benefits from the carbon markets and carbon credits between the project proponents and the impacted communities; and
    • proposed development of communities around the project.

The Climate Change (Amendment) Bill, 2023 has already undergone public participation and we will be keen to see the developments or amendments made to this Bill when it is enacted into law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.