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Laws and Policies

Gold Standard

The Climate Change (Carbon Markets) Regulations 2024

Published

The Climate Change (Amendment) Act, 2024, is a direct amendment of the Climate Change Act of 2016 and defines Kenya's participation in both compliance and voluntary carbon markets, as well as the principles that would govern its trading activities. The Act provides a framework for the implementation of carbon market projects. The objective of the regulation is to create incentives and implement initiatives to support emissions reductions and removals activities, and provide guidance on social contributions, understood as monetary benefits accrued from carbon market projects developed on community and public land, which are disbursed to the relevant communities. The Cabinet Secretary may, with the approval of the Cabinet, enter into any agreement to trade in a carbon market established or overseen by an internationally recognised entity that is approved by a recognised credible international body.
Governance and Institutional Framework
The Act establishes the governance and institutional framework necessary for participation in carbon markets. It assigns a Cabinet Secretary the responsibility of overseeing carbon market policies and other related crediting mechanisms, and is responsible for the following sectors: energy; transport; agriculture; forestry and land use; industrial processes and product use; and waste.
The Cabinet Secretary is responsible for coordinating international processes and negotiating bilateral or multilateral agreements for the international trade of emission reductions and removals. Supporting institutions include a Designated National Authority (DNA), a Climate Change Directorate, a multi-sectoral technical committee and an ad-hoc committee. A National Carbon Registry will also be set up under this regulation in order to keep, maintain, and update registers of carbon market projects.
Their respective responsibilities include the following:
The DNA shall: 
(a) provide key information to carbon project proponents;
(b) evaluate carbon project concept notes and issue letters of no objection;
(c) issue approval letters to project proponents;
(d) submit project design documents to the ad hoc committee;
(e) monitor compliance of registered carbon projects;
(f) guide on operationalizing Article 6.2 of the Paris Agreement;
(g) guide on Article 6.4 of the Paris Agreement, including activity approval and authorization;
(h) guide on corresponding adjustments and project eligibility;
(i) maintain a list of recognised carbon standards;
(j) appoint ad hoc committees for reviewing project documents.
The Climate Change Directorate shall:
(a) advise the government on regulating carbon market activities for compliance;
(b) coordinate and mobilise sectoral stakeholders for effective carbon market management;
(c) coordinate public participation and awareness on carbon markets;
(d) facilitate research on carbon markets.
The Multi-Sectoral Technical Committee: 
(a) will be composed of members from ministries, counties, departments, and agencies representing all sectors of the Intergovernmental Panel on Climate Change (IPCC). These members will be nominated by the respective sector Cabinet Secretaries and the Council of Governors;
(b) Nominated members must have expertise in energy, transport, agriculture, forestry and land use, industrial processes and product use, or the waste sector;
The Designated National Authority will also appoint ad hoc committees, with up to five members from the multi-sectoral technical committee, to:
(a) review project design documents and provide recommendations;
(b) offer technical advice on carbon projects.
A National Carbon Registry shall:
(a) maintain and update the registers as per section 23G(3) of the Act;
(b) ensure the confidentiality of collected information;
(c) submit quarterly reports to the Cabinet Secretary on the information in the register under section 23G(3) of the Act.
Key Requirements 
The framework also notably establishes the requirement to obtain an environmental impact assessment for all carbon credit projects and to enter into community development agreements that establish terms on the distribution of benefits between the Project Developers and impacted communities. A contribution of aggregate earnings for all land-based projects ist set at 40%, and annual social contribution to the community in projects developed on public land is set at 25%.
Process of Approval and Authorisation
The Act designates the DNA to provide guidance on the rules, modalities, and procedures of Article 6.4 of the Paris Agreement, including approval and authorisation of activities and the project proponents.
Other Considerations 
<ul>
<li>Carbon market projects on private land by private entities are not required to disburse annual social contributions.</li>
<li>At least 25% of aggregate earnings of the previous year for non-land based projects, and at least 15% for land-based projects, shall be paid into a consolidated fund, to be used for sustainable development.</li>
<li>It is now an offence to conduct unauthorised trade in carbon credits.</li>
</ul>

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Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

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Groups  of people who are adversely affected by climate change or the response to it

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Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

Social and cultural groups that share collective ancestral ties to the lands and natural resources where they live, occupy or from which they have been displaced

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People with different national or cultural traditions from the dominant population

Either money or something of monetary value is transferred between two or more organisations, people or countries.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

The Climate Change (Carbon Markets) Regulations 2024

Policy instrument

Risk

Impacted group

Just transition

Greenhouse gas

Finance