Southern Africa Carbon Markets Assessment

Our collaboration with the USAID Climate Finance for Development Accelerator (CFDA) assessed the state of carbon regulations and nature-based carbon projects in Angola, Botswana, Eswatini, Lesotho, Namibia, and South Africa. Here’s what we found:

Policy progress

• South Africa leads with a functional compliance market, while Namibia shows promise with enabling regulations
• Botswana and Angola lack formal frameworks, and Eswatini and Lesotho have yet to initiate significant efforts

Carbon projects snapshot

• South Africa accounts for 93% of issued credits across the region since 2011, with Namibia (4%), Lesotho (3%), and Angola (>1%) trailing behind.
  70% of credits stem from renewable energy and energy efficiency projects, reflecting the region’s focus on energy access
• Nature-based projects are critically underdeveloped, with no credits issued from 21 registered AFOLU projects (17 in South Africa), curtailed by financial, methodological, regulatory, and market challenges

To close the gap, we need targeted action:

Macro level:

• Support countries in developing regulatory frameworks for carbon markets, including frameworks for Article 6 trading

Sector level:

• Adapt existing carbon methodologies to improve their applicability to Southern African ecology and ecosystems

Organizational level:

• Provide technical advisory support to develop higher quality carbon projects and investment advisory support to mobilize increased funding into those projects

By addressing these challenges, Southern Africa can unlock its full carbon market potential, driving both climate action and economic growth.

Download the full report