Gabon set to launch first batch of climate credits

Gabon’s environment minister says that Africa's seventh-largest oil producer is looking for innovative ways to exchange debt and raise loans through carbon credits.

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Image : ipopba / Adobe Stock

Gabon’s minister of environment isn’t exactly what you might expect from a government figure in Central Africa. Professor Lee White, originally from Manchester, UK, was made a government official in 2019 after working in Gabon since 1989, when he arrived to conduct research for his doctorate.

The 57-year-old was credited with helping to implement a raft of environment-first policies after becoming the director of Gabon’s 13 national parks in 2009. He believes that the tiny Central African country, the seventh largest oil producer in Africa, can nevertheless serve as a model for other countries in the fight against climate change.

“We are very open to talking to other countries about what has worked in Gabon,” he tells African Business.

“We have got some examples of best practice and we are interested to share them. We think that we can influence the climate change negotiations and the biodiversity negotiations.”

Gabon contains approximately 22m hectares of tropical rainforest. (Image: caroline75005 / Adobe Stock)

Gabon hosted Africa Climate Week in late August, a UN backed conference that brought together a range of multilateral stakeholders including the World Bank and the African Development Bank (AfDB). The conference sought to find workable solutions to Africa’s climate crisis and boost finance for climate-related policies and projects. It also stands Gabon in good stead to impact climate negotiations at the UN climate summit (Cop27) in Egypt this November.

One of the key issues facing Gabon is the Congo Basin rainforest – the world’s largest rainforest after the Amazon, known as the “lungs of Africa”. The giant forest – which spans Cameroon, the Central African Republic, the Republic of Congo, the Democratic Republic of Congo, Equatorial Guinea and Gabon – faces an enormous threat of deforestation from illegal logging.

It is critically important for the global absorption of carbon in the atmosphere. White says that Gabon has implemented several innovative policies to preserve its rainforest, which covers 88% of the country.

Creative uses for carbon credits

Gabon hopes to create its first batch of carbon credits by late October, in time for Cop27.

“We will create 90m carbon credits for the 2010-18 period,” says the minister. “But creating carbon credits is proving to be a very long process. The United Nations Framework Convention on Climate Change (UNFCC) validates the credit, they go into a UNFCC website and the Gabonese registry.”

Carbon credits are sold to corporations and individuals that wish to offset their carbon emissions. Each credit represents a certain amount of carbon that Gabon has either managed to absorb by actively taking carbon from the atmosphere or implementing policies that prevent it from being released.

The government is also attempting to use carbon credits to borrow on the international market.

“We can use them in more creative ways,” says White. “We are talking to various multilateral partners about the idea of exchanging carbon against debt, creating carbon-backed bonds. We are thinking of selling these credits, but we are also thinking about how we can be a bit more innovative, to see if we can raise money to invest in sustainable forestry.”

The minister says that Gabon is currently in conversation with lenders like the IMF and World Bank for sustainable development green bonds.

Green bond issuances in Africa have historically been well behind other regions in the world. According to the Brookings Institution, Africa accounts for just 0.4% of global green bond issuance, a figure far below its 17% share of global population and even its 3% share of global GDP.

Africa’s first green bond was raised by Nigeria in 2017 at a modest $29m. South Africa, Morocco and Nigeria make up more than 97% of the total issuance of green bonds in Africa – followed by small issuances from Seychelles, Namibia and Kenya.

Gabon’s entry into the market would serve as a good example of a smaller Francophone African country that can successfully raise debt to pump into green projects.

The quest for “green oil”

Gabon markets itself internationally as the most carbon positive country in the world – largely due to its huge rainforests and a population of only around 2m people. However, a few decades ago most of Gabon’s money came from its huge oil reserves.

With dwindling reserves, Gabon’s oil output peaked in 1997 at 370,000 barrels per day (bpd). But even this year it was Africa’s seventh largest oil producer, pumping out 195,000 bpd.

The government is also on an investment drive, improving its Hydrocarbon Code in 2019 in a bid to attract foreign investment and boost oil output. Yet the hydrocarbon industry sits uncomfortably alongside Gabon’s moves towards a greener future.

White says the carbon produced by countries that buy oil from Gabon is not factored into the calculation to determine its carbon status.

“We net absorb 112m tonnes of carbon across all sectors of our local economy. That doesn’t include the oil exports. Typically emissions for oil are accounted for in the country where they are burnt, not the country that produces it. If we were to include that we have about 16m tonnes of carbon emissions that we export as oil,” he says.

A possible solution is to offset the carbon at source during its production with carbon credits. This would create what the minister calls “green oil”.

“Even if we account for oil we are still highly and probably the most carbon positive there is,” he says. “Selling green oil for $10 a barrel more expensive than un-offset oil would represent a carbon price of about $30 a tonne, so that would be really interesting.”

An African forest elephant in Loango National Park In Gabon. (Image: jwngshar narzary/EyeEm / Adobe Stock)

Protecting wildlife

In 2021, research showed that Gabon was the last global stronghold for the critically endangered African forest elephants, which are much smaller than their savanna equivalents. The population has been dwindling for many years due to loss of habitat and poaching with smaller numbers spread across West and Central Africa in countries like Cameroon, Republic of Congo and Côte d’Ivoire.

White says that 75% of the forest elephant population has been lost in the last 20 years, but Gabon has actually seen its numbers increase.

“Our population has actually gone up by about 50%, so today we have about 75% of all the forest elephants even though we are only 10% of the forest.”

The minister attributes the success to rigorous anti-poaching techniques that make use of satellite imagery to locate criminals. The success has led to many of the elephants in the Congo Basin seeking refuge in Gabon to escape poachers.

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