A massive carbon credit project-the second-largest in the world-has come to a halt, with the project's operators claiming that government policies are behind the stoppage.
In May of this year, Zimbabwe said it would require companies to give up half of their revenue. This change of government regulatory policy has prompted the operators of the Kariba REDD+ Project to stop all work while the matter is sorted. The project is operated by South Pole and Carbon Green Africa.
"We did write soon after the government advised that for those projects already running we needed to regularize. We are however still waiting to get a response from the authorities and as such, operations have stopped," Charles Ndondo, managing partner of Carbon Green told Bloomberg via email.
Such a large demand from the government of the global offsets industry-along with possible similar demands from Malawi and Zambia-could call into question the financial feasibility of carbon offsets.
Zimbabwe has yet to finalize the revenue demand into law, sending the project into even more uncertainty. Zimbabwe's environment minister Mangaliso Ndlovu expects that the regulations could be codified into law as early as this Friday.
The carbon offset project has been operating for more than a decade, with 23 million credits purchased from it so far, representing 23 million tons of carbon dioxide or its equivalent.
But the project is not without controversy. In March, South Pole was accused of exaggerating its climate claims surrounding its forest-protection projects that facilitate the offsets. South Pole has claimed that its Kariba project has saved from destruction a forest nearly the size of Puerto Rico.
But some experts have alleged that South Pole has overestimated the scope of its forest preservation, meaning that ultimately, companies who purchased carbon credits from Kariba, overstated their contribution to combat climate change.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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