| Abstract |
The idea of carbon trading exists as a product of increasing awareness of the need for controlling emissions attached with the understanding that in order to progress, a monetary value needs to be positioned along with the environmental importance. The Kenyan administration attaches high priority to Carbon Development Mechanism (CDM), which is seen as an instrument for mobilizing investments in the country and advancing the development of new industrial projects. National CDM guidelines had already been developed shortly after the turn of the millennium. Practical project implementation has, however, made slow progress so far, as it is still hampered by a number of factors. Above all, these include lack of information about the scope of CDM on the part of prospective project developers and insufficient technical and institutional capacity. Although Kenya already has quite a substantial number of projects in the pipeline, including some that have already been approved by the competent national authority (NEMA), as at October 2007, only one has been registered with the CDM Executive Board (EB), the UN body responsible for the international approval of CDM projects. The current CDM projects stem largely from the energy sector with a major potential in the geothermal sector. Only three were in the process of validation in October 2007. Regarding international registration by the EB, the 35- MW power station project of the leading sugar producer Mumias Sugar Company Limited for electricity generation from sugarcane bagasse is rated as the most advanced. This paper illustrates key opportunities presently available in Kenya’s energy sector for carbon trading and some challenges that the sector is facing. It draws attention to viable market opportunities in the energy sector that potentially could engender lofty investment income. |