Akinwumi Adesina, the outgoing president of the African Development Bank, has raised a critical issue that resonates deeply with the agricultural sector and investors: the undervaluation of carbon credits from African forests. This concern is not just about environmental justice but also about economic fairness and agricultural sustainability.
Adesina’s warning about “carbon grabs” parallels the historical issue of land grabs, where foreign entities exploit local resources without equitable compensation. In the context of carbon credits, African countries are being shortchanged for their environmental services. This disparity is stark: while carbon prices in Europe can soar to $200 per ton, in Africa, they can plummet to as low as $3 per ton. This undervaluation has significant implications for agriculture, which is intrinsically linked to land use and forest management.
For African farmers and agricultural communities, the undervaluation of carbon credits means lost opportunities for economic development. Agriculture in Africa is often subsistence-based, and many communities rely on the land not just for food but also for income. Proper valuation of carbon credits could provide these communities with additional revenue streams, enabling them to invest in sustainable farming practices, improve infrastructure, and enhance food security.
Moreover, the issue of sovereignty is crucial. When African countries give up large tracts of forest for carbon removal, they risk losing control over their land and resources. This can lead to conflicts and displacement, further destabilizing agricultural communities. Ensuring that African countries retain sovereignty over their land is essential for maintaining stable and productive agricultural systems.
Investors, too, have a stake in this issue. The undervaluation of carbon credits represents a missed opportunity for sustainable investment. By investing in African carbon credits at fair prices, investors can support environmental conservation while also generating returns. This could lead to a win-win situation where both environmental and economic goals are achieved.
The African Development Bank’s report highlights that Africa is “nature rich and cash poor.” The continent’s natural wealth, if properly valued, could unlock significant capital. For the agricultural sector, this means more resources for sustainable practices, better infrastructure, and improved market access. It also means that farmers and agricultural communities can benefit from the economic value of their environmental services, rather than being left out of the equation.
Adesina’s call for a “proper valuation” of Africa’s green wealth is a call to action for policymakers, investors, and agricultural stakeholders. It is an opportunity to create a more equitable and sustainable future for Africa’s agricultural sector. By addressing the undervaluation of carbon credits, we can ensure that Africa’s green wealth translates into real economic benefits for its people, fostering a more resilient and prosperous agricultural landscape.
