Kenya aims to set up an emissions trading system that will allow companies and other bodies to buy emissions allowances, the finance minister sai earlier this week, as the country strives to limit the release of greenhouse gases. Emissions trading is a pollution control mechanism where a central authority issues a limited number of permits for the release of specific greenhouse gases. Companies can then buy these permits and also trade them.
Many countries are using a price on carbon to meet climate goals, in the form of a tax or under an emissions trading or cap-and-trade plan where companies or countries face a carbon limit. Kenya loses about 2%—2.4% of its GDP annually due to the effects of climate change, such as drought and floods, according to a 2018 Kenya National Bureau of Statistics study. The study also showed droughts cost Kenya 8% of GDP every five years.
SOURCE: BUSINESS DAY LIVE