The Climate Change (Amendment) Bill, 2023
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
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Executive
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Final
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New National Carbon Registry Established
The Bill introduces Section 23G, establishing the National Carbon Registry. Controlled by the Designated National Authority, the Registry will maintain records of:
- Carbon credit projects and programmes implemented in Kenya
- Authorisations for participation in carbon market initiatives
- The national carbon budget and greenhouse gas reduction units
- Issued, transferred, or cancelled carbon credits.
Mandatory Community Earnings Share
Section 23E introduces community benefit-sharing requirements through mandatory Community Development Agreements. Projects must allocate a portion of their annual aggregate earnings to the community:
- Land-based projects: Must provide at least 40% of aggregate earnings.
- Non-land-based projects: Must provide at least 25% of aggregate earnings.
- These agreements must be reviewed and updated at least once every five years.
Social and Environmental Safeguards
To protect local communities and ecosystems, the Bill introduces strict project criteria:
- Section 23D requires all carbon trading projects to undergo an environmental and social impact assessment (ESIA) in accordance with the Environmental Management and Coordination Act, 1999.
- Section 23A bans carbon credits linked to human rights violations, projects lacking free prior informed consent, or those registered before January 1, 2013.
Restructured Climate Change Council
Section 7 of the principal Act is amended to reorganize the National Climate Change Council. The amendments remove certain institutional representatives and add a dedicated representative of the youth to ensure broader stakeholder representation.
Bill No.
No. 42 of 2023
Gazette No.
Supplement No. 127
Sponsor
Kimani Ichung'wa
Background
The Climate Change (Amendment) Bill, 2023 seeks to amend the Climate Change Act, 2016 (the principal Act). While the principal Act provides mechanisms to enhance climate change resilience and foster low-carbon development, it lacks a legal and regulatory framework for regulating carbon markets. This Bill introduces the necessary legal provisions to govern carbon trading in Kenya, align transactions with Article 6 of the Paris Agreement, and protect community interests.
Key Amendments
New Definitions
Section 2 of the principal Act is amended to define several key terms, including "aggregate earnings", "carbon budget", "carbon credits", "carbon market", "voluntary carbon market", "non-market approaches", and "nature-based solutions".
Council and Administration Updates
- Council Membership: Amends Section 7 to streamline the Climate Change Council, removing several advisory positions and adding a representative of the youth.
- Directorate Renaming: Sections 9 and 10 are amended to change the title of the head of the Climate Change Directorate from "Director" to "Secretary".
- Climate Action Plan Guidance: Section 13 is expanded to require the National Climate Change Action Plan to guide the national carbon budget across five-year cycles, manage the greenhouse gases emission profile, and map out the carbon credit project pipeline.
New Obligations
Carbon Market Regulation (Part IVA)
- Compliance: Section 23A applies to all carbon markets and bans credits from projects that violate human rights, lack free prior informed consent, or possess significant negative social or environmental impacts.
- Trading Requirements: Under Section 23B, transactions must aim to reduce greenhouse gas emissions under prescribed carbon standards and must be accounted for in tonnes of carbon dioxide equivalent (tCO2eq).
- Bilateral & Multilateral Agreements: Section 23C authorizes the Cabinet Secretary, with Cabinet approval, to enter into bilateral or multilateral carbon trading agreements with other State Parties or private entities.
Community Development Agreements
- Section 23E mandates that any land-based carbon project must enter into a Community Development Agreement.
- Land-based projects must contribute at least 40% of their aggregate earnings from the previous year to the community.
- Non-land-based projects must contribute at least 25% of their aggregate earnings from the previous year.
- The agreements must manage stakeholders, outline benefit-sharing, and specify socio-economic development priorities. They must be recorded in the National Carbon Registry.
Dispute Resolution
Section 23H establishes a structured framework for disputes:
- Land-based projects: Disputes must first be subjected to the dispute resolution mechanism set out in the Community Development Agreement and resolved within 30 days.
- Non-land-based projects: Disputes must be resolved through Alternative Dispute Resolution in the first instance.
- Appeals: Any dispute not resolved within 30 days of submission shall be referred to the National Environmental Tribunal.
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