By establishing the continent's first carbon credit market, Egypt hopes to encourage the private sector across Africa to reduce its carbon footprint

On November 6th, Egypt's first entity to issue carbon credits was established by an agreement between the Egyptian Exchange Holding Company for Capital Markets Development, the Agricultural Bank of Egypt, and Libra Capital.

The voluntary carbon market, where firms can buy carbon credits to offset their CO2 emissions, also opened for business on November 9. The United Nations Climate Change Conference, often known as COP27, will be held in Sharm el-Sheikh from November 6-18, coinciding with the launch of the two new organisations.

Businesses are not required to take part, but those that do will see some return on their investment in carbon reductions thanks to the fact that carbon credits will be traded like securities on the new market.

According to Sarah Abdel-Kader, an environmental and sustainability engineer at the American University in Cairo's Institute of Global Health and Human Ecology, "this step is important in boosting Egypt's efforts to reduce CO2 emissions without negatively impacting economic development." According to the project's authors, "the sustainable strategy taken by the Egyptian government in development is supported."

In the Middle East and North Africa region, Egypt ranks third in carbon emissions, behind Saudi Arabia and Iran, according to data from the World Resources Institute.

The continent-wide green economy is set to get a boost from the new carbon market. On November 9th, Egypt's Minister of the Environment Yasmine Fouad stated that Egypt is prepared to assist Africa at this time of transition.

"It is excellent that Egypt becomes the first mover into carbon credits in Africa," Hjalmer Sommer, an environmentalist based in Denmark and owner of a climate programme initiative in Uganda, said.

Speaking to Al-Monitor, he said, "we need to focus more on offsetting carbon, to secure the rainforest, and to make limitations to the governments that allow chopping down the rainforest in South America and Africa."

He advocated for a prohibition on multinational corporations' acquisition of rainforest territory around the world. Bamboo and hemp trees have a far greater CO2 offsetting potential per acre, thus more of them should be planted, he said.