Building Resilient African Carbon Markets in a Shifting Global Climate Order
By Lily Ronoh-Waweru – Strategic Communications Specialist
When Verst Carbon convened a fireside discussion to examine the implications of a potential U.S. exit from the UNFCCC, the objective was not to speculate on geopolitics. It was to confront a harder question: if a major global climate actor shifts course, what must Africa do to ensure its carbon markets remain stable, credible, and investable?
The room brought together clean cooking developers, nature-based project implementers, dMRV specialists, corporate stakeholders, researchers, and regulatory voices. The conversation quickly moved beyond headlines and into structural reality.
The conclusion was clear. The real issue is not whether African carbon markets can survive external political shifts. It is whether they are built to withstand them.
Financial Shocks Expose Structural Weaknesses
Participants acknowledged that financial shocks are felt immediately. Climate finance flows, voluntary market demand signals, and corporate purchasing behaviour respond quickly to geopolitical uncertainty. When a major economy signals retreat, markets interpret it as hesitation. Confidence softens. Prices fluctuate. Corporate buyers reassess exposure.
However, diplomatic realignments and institutional restructuring take longer to unfold. Twelve months or more may pass before structural consequences fully materialise. This distinction matters because it reveals something important: the system does not collapse overnight. It is tested.
And stress tests reveal dependency.
The Real Vulnerability Is External Dependence
One of the most candid threads running through the discussion was Africa’s reliance on external capital and foreign offtakers. Many projects depend heavily on concessional funding, aid-based climate finance, and international buyers. When those anchors weaken, the entire ecosystem feels exposed.
If demand sits primarily outside the continent, resilience will always be conditional. True market maturity requires diversified capital sources and domestic participation.
The solution is not to replace one external funder with another. It is to reduce structural dependence altogether.
African carbon markets must build internal demand, internal financing mechanisms, and stronger regional frameworks.
Communities Feel the Impact First
Geopolitical uncertainty does not first impact boardrooms. It impacts projects on the ground.
Clean cooking initiatives, regenerative agriculture programmes, and nature-based projects operating in marginalised areas rely on predictable revenue streams. Funding delays or price instability directly affect implementation timelines and community benefits.
At the same time, participants raised ethical concerns about carbon credit legitimacy. Many communities do not fully understand how carbon markets function or how revenue is structured. When funding becomes unstable and benefits are unclear, mistrust grows.
Strengthening carbon markets therefore requires not only financial redesign but deeper awareness and measurable local impact. Transparency, education, and visible benefit-sharing must be central to long-term resilience.
Compliance Is Tightening and That Is an Opportunity
While political shifts create uncertainty, regulatory standards are not weakening. If anything, compliance requirements are becoming more stringent. Article 6 mechanisms remain complex. Validation and verification standards are tightening. Investors increasingly require robust digital MRV systems and reliable data integrity.
Rather than viewing this as a burden, the room recognised it as an opportunity. Stronger data systems, transparent national registries, and credible verification frameworks increase investor confidence and attract serious capital.
Integrity is not an administrative requirement. It is the currency of durable markets.
The Strategic Pivot: Build Domestic Demand
The most forward-looking portion of the discussion focused on demand.
Africa has substantial project potential across nature-based solutions, clean cooking, biochar, and distributed energy systems. What remains underdeveloped is structured, consistent local demand.
Kenyan corporates, financial institutions, and large enterprises have a strategic opportunity to become active offtakers. Carbon credits should not be positioned as philanthropic gestures or public relations instruments. They can serve as risk mitigation tools, future compliance hedges, and supply chain resilience strategies.
Building a business case for carbon markets in Kenya requires reframing the conversation at executive level. Carbon is not merely a climate discussion; it is a strategic business discussion.
A domestic offtake ecosystem would stabilise pricing signals, reduce exposure to external political shifts, and ensure that value circulates within the local economy.
Strengthen Regional Cooperation and Financing Mechanisms
Participants also proposed exploring regional African carbon exchanges and Pan-African climate funds. Diversifying financing sources, partnering with commercial banks, and structuring investable carbon-linked agricultural and mobility projects were identified as necessary steps.
Carbon revenue should complement core business sustainability models, not replace them. Blended finance structures and results-based climate financing mechanisms can reduce dependency on single-country exposure.
Resilience requires diversification.
The Path Forward: From Vulnerability to Maturity
The overarching consensus was that Africa should not pause its climate initiatives due to external political shifts. Instead, this moment should catalyse stronger local ownership, clearer regulatory frameworks, improved data systems, and expanded private-sector participation.
The question we gathered to discuss was whether African carbon markets would stand if U.S. climate politics shifts.
The answer is that they can but only if they evolve.
Resilient markets are not built in moments of stability. They are built in moments of uncertainty, when structural weaknesses become visible and reform becomes urgent.
If Africa builds domestic demand, strengthens compliance systems, improves community awareness, and anchors carbon markets within its own economic ecosystem, external political shifts will become less destabilising and more catalytic.
The opportunity is not to react. It is to redesign.