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This report provides a comparative analysis of the engagement of Kenya, Tanzania, and Uganda with global carbon markets, examining the roles of communities, governments, and private actors. It highlights successes, challenges, regulatory gaps, and opportunities for fostering inclusive and sustainable carbon business models across these East African nations.

Kenya has rapidly developed a comprehensive legal framework, including the Climate Change Act (2016, amended 2023) and the Carbon Markets Regulations (2024), establishing NEMA as the Designated National Authority (DNA) and mandating a National Carbon Registry and specific community benefit-sharing percentages. However, concerns persist regarding the speed of legislative enactment potentially limiting public participation and the lack of a clear definition of “carbon rights,” which could undermine community ownership.

Tanzania enacted the Environmental Management (Control and Management of Carbon Trading) Regulations in 2022 (amended 2023) and the Environmental Management (Amendment) Act in 2024, aiming to empower the National Carbon Monitoring Centre (NCMC). While ambitious, implementation has been hampered by significant challenges, as highlighted by the Controller and Auditor General (CAG), including stalled projects, underperformance in revenue generation, regulatory and institutional ambiguities, and insufficient monitoring and transparency. Discrepancies in reported benefit-sharing figures also create confusion.

Uganda recently operationalized its National Climate Change Act (2021) with the National Climate Change (Climate Change Mechanisms) Regulations (2025). This framework appears robust, emphasizing internationally accredited verification, a national registry, and project-specific benefit-sharing plans. The key challenge lies in effective implementation, resourcing the Ministry of Water and Environment, and addressing past issues of intermediary exploitation in the voluntary market.

Across all three nations, community participation varies. Successful projects, often smaller-scale or developer-led with strong local partnerships (e.g., Mikoko Pamoja in Kenya, Carbon Tanzania and MJUMITA projects in Tanzania, Trees for Global Benefits in Uganda), demonstrate that tangible community benefits (income, social services, livelihood improvements) and environmental integrity are achievable. However, large-scale projects, particularly those on communally managed lands, face significant challenges related to land rights, Free, Prior, and Informed Consent (FPIC), and equitable benefit distribution, as seen in Kenya’s Northern Rangelands Carbon Project and concerns raised by Maasai communities in Tanzania. Local cooperatives and village associations play a crucial, albeit sometimes capacity-constrained, role in project implementation and benefit management.

Dominant business models include REDD+, blue carbon, agroforestry, and soil carbon, with land-based models prevailing, underscoring the critical importance of secure land tenure. Models delivering strong local co-benefits tend to foster greater community buy-in. Key international buyers are active in the region, but the role of intermediaries needs careful regulation to prevent exploitation.

Technological advancements in MRV (GIS, drones, satellite monitoring) are being adopted, but their effectiveness depends on rigorous application and ground-truthing. All three countries face systemic capacity gaps in domestic MRV despite targeted international support, pointing to the need for sustained, nationally-owned strategies and regional cooperation.

Equity concerns are paramount. Fair compensation relative to global credit prices remains a challenge, with communities often receiving a small fraction of the final market value. Safeguards against greenwashing and exploitation are being developed through national regulations (e.g., Kenya’s Green Finance Taxonomy, Uganda’s verification requirements) and adherence to international standards, but their practical effectiveness is still evolving, with documented cases of rights violations and project failures highlighting persistent risks.

The report concludes with recommendations for strengthening regulatory frameworks with a focus on defining carbon rights and ensuring genuine community participation; enhancing institutional capacity for implementation and MRV; fostering transparent and equitable benefit-sharing mechanisms that empower communities; investing in domestic MRV capabilities through regional collaboration; and implementing robust safeguards to ensure market integrity and protect community interests. Harmonization of standards at the East African level could further enhance market attractiveness and efficiency.

Chapter 1: The Evolving Carbon Economy in East Africa

1.1. The Global Carbon Market Context and Its Relevance for Kenya, Tanzania, and Uganda

Carbon markets have emerged globally as significant mechanisms for channeling finance towards climate change mitigation efforts. These markets operate on the principle of trading greenhouse gas (GHG) emission units, typically denominated in tonnes of carbon dioxide equivalent (tCO2​e), thereby enabling public and private entities to cooperate across national and sectoral boundaries.¹ The overarching goals are to enhance the cost-effectiveness of mitigation actions, mobilize private sector innovation and resources, and support countries in achieving higher climate ambition.¹ Carbon markets are broadly categorized into compliance markets, driven by national or international regulatory obligations such as Nationally Determined Contributions (NDCs) under the Paris Agreement or the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and voluntary carbon markets (VCMs), where businesses, organizations, and individuals voluntarily purchase carbon credits to offset their emissions or support climate action.¹

For developing regions like East Africa, these markets present a dual opportunity: contributing to global GHG emission reductions and fostering sustainable development through co-benefits such as enhanced energy access, biodiversity conservation, and job creation.¹ The potential for cost savings in achieving climate targets, estimated to be in the order of 40-60% globally by 2030 through the full use of market mechanisms, further underscores their attractiveness.⁵

The African continent possesses substantial, largely untapped potential in the carbon market. Current estimates suggest that Africa generates only about 2% of its annual carbon credit potential.⁶ Within this context, East Africa, and Kenya in particular, has emerged as a notable player in the VCM.⁸ This regional leadership indicates existing capacity and favorable conditions that could be leveraged for further growth, offering valuable lessons for neighboring countries like Tanzania and Uganda as they develop their own carbon market pathways.

However, the global carbon market, especially the VCM, is not without significant challenges. Recent years have seen a slowdown in market growth and considerable scrutiny over the credibility of certain carbon credits, particularly those originating from Reducing Emissions from Deforestation and Forest Degradation (REDD+) and improved cookstove projects.⁹ These two project categories constitute a large proportion of Africa’s current carbon credit supply, making the region particularly susceptible to shifts in international buyer confidence.⁹ Concerns about the additionality of emission reductions, permanence of sequestration, potential for overestimation of impact, and instances of “greenwashing” have impacted carbon credit prices and overall market trust.⁹

This international context of opportunity mixed with significant risk shapes the environment in which Kenya, Tanzania, and Uganda are seeking to unlock their carbon economies. The heavy reliance of many African carbon projects on the VCM makes the region vulnerable to global market volatility and shifts in demand driven by integrity concerns. This underscores a critical need for these East African nations to focus on developing high-integrity projects, robust verification systems, and diversified portfolios of carbon credit types to build market resilience.

Furthermore, the influx of interest and finance associated with carbon markets can create a “carbon rush” dynamic.⁷ While this offers the potential for much-needed investment, it also carries the risk that projects may prioritize rapid carbon credit generation over the assurance of genuine, long-term community benefits and environmental safeguards. Reports concerning land rights, inadequate community consultation, and inequitable benefit sharing in various carbon project contexts globally, and within the region, signal that careful management and stringent regulatory oversight are essential to ensure that the pursuit of carbon finance aligns with, rather than undermines, sustainable and equitable development goals.¹¹

1.2. Study Objectives and Approach

The primary objective of this report is to explore how communities, governments, and private actors in Kenya, Tanzania, and Uganda are engaging with the global carbon market. The analysis aims to highlight successes achieved, identify persistent challenges and regulatory gaps, and uncover opportunities for fostering inclusive and sustainable carbon business models tailored to the East African context.

This study adopts a comparative approach, examining the distinct yet interconnected pathways these three nations are forging in the carbon economy. The research is guided by key questions addressing:

• The legal and regulatory frameworks governing carbon markets.
• The nature and equity of community participation and benefit-sharing mechanisms.
• The dominant carbon business models and their effectiveness.
• The role of technology in verification and the status of domestic MRV capacity.
• The measures in place to ensure equitable compensation and prevent greenwashing.

By systematically addressing these questions, this report seeks to provide a comprehensive evidence base to inform policy development, investment decisions, and community engagement strategies aimed at responsibly unlocking the carbon economy in East Africa.

Chapter 2: Navigating the Policy and Regulatory Terrain

The development of robust policy and regulatory frameworks is fundamental to the effective and equitable functioning of carbon markets. This chapter examines the legislative landscapes, institutional arrangements, and governance dynamics in Kenya, Tanzania, and Uganda, followed by a comparative analysis to identify strengths, weaknesses, and opportunities for regional harmonization.

2.1. Kenya: Legislative Frameworks, Institutional Roles (NEMA), and Governance Dynamics

Kenya has proactively established a relatively comprehensive legal architecture for its carbon markets. The Climate Change Act, 2016, subsequently amended in 2023, serves as the foundational legislation.¹⁷ This Act established the National Climate Change Council, which provides policy direction, and crucially designated the National Environment Management Authority (NEMA) as the lead agency responsible for overseeing carbon market operations.¹⁷ The Climate Change (Amendment) Act, 2023 specifically introduced provisions for the regulation of carbon markets, including a significant mandate for Community Development Agreements (CDAs) for land-based projects. These CDAs require an annual social contribution of at least 25% of the project’s aggregate earnings from the previous year to be channeled to the impacted community.¹⁸

Building on this, the Climate Change (Carbon Markets) Regulations, 2024, which became operational in May 2024, provide detailed technical and regulatory oversight.¹⁷ A key feature of these regulations is the establishment of a National Carbon Registry. This registry, to be managed by NEMA in its capacity as the Designated National Authority (DNA) for Article 6 mechanisms, is intended to track all carbon credits generated within Kenya, ensuring transparency, preventing double-counting, and mitigating risks of greenwashing.¹⁷ The regulations also detail procedures for project approval, differentiate between land-based and non-land-based projects, and refine community benefit sharing. For land-based projects on public or community land, the annual social contribution is set at a minimum of 40% of the project’s aggregate earnings, while for non-land-based projects on similar land, it is at least 25%.²² Furthermore, all carbon projects are required to undergo an Environmental Impact Assessment (EIA) conducted by NEMA.²² NEMA brings experience to this role, having previously served as the DNA for Clean Development Mechanism (CDM) projects.²³

Despite these legislative advancements, several governance concerns have been raised. The rapid pace at which both the 2023 Act amendment and the 2024 Regulations were enacted – reportedly within weeks – has led to criticism regarding limited public participation and stakeholder consultation.¹⁴ This haste in legislative development, while demonstrating governmental will to establish market structures, may have inadvertently compromised the depth of stakeholder buy-in, potentially creating grounds for future disputes or implementation hurdles.

A significant and fundamental concern highlighted by civil society organizations is the lack of a clear definition of “carbon rights” within the Kenyan legal framework.¹⁴ Carbon rights determine who owns the carbon sequestered or the emissions reduced, and thus who has the authority to trade the resulting credits. Without a clear legal definition vesting these rights in communities on whose land projects are often situated, communities may be relegated to passive recipients of benefits rather than active owners and participants in the carbon market. This ambiguity could significantly undermine their negotiating power and long-term stake in carbon projects.

The mandated Community Development Agreement (CDA) model has also drawn criticism.¹⁴ Borrowed from the extractives industry, where resources are often considered state-owned and projects are pursued in the “public interest,” its application to carbon projects on community land is contentious. It potentially conflicts with constitutional provisions and the Community Land Act, which affirm communities’ full ownership rights over their land and their autonomy to contract with external investors on their own terms. The structure of CDAs, particularly the composition of their oversight committees, may also favor government influence over genuine community control.

NEMA’s multifaceted role as DNA, registry manager, and EIA regulator is pivotal. While its experience with the CDM is an asset ²³, NEMA also undertakes its own environmental projects.²⁶ This dual role as both a regulator and an implementer could potentially lead to conflicts of interest, particularly if NEMA-led initiatives compete for similar resources or approvals as private or community-led carbon projects. The institutional capacity of NEMA to effectively manage the complex technical and administrative demands of a burgeoning carbon market, including sophisticated MRV oversight and registry management, will be a critical determinant of the market’s integrity and success.

The differentiation in benefit-sharing percentages between land-based (40%) and non-land-based (25%) projects ²² is a notable feature. While appearing to favor land-based projects, which are often more directly linked to community resources, the practical impact will depend heavily on the precise definition of “aggregate earnings” and the transparency and effectiveness of mechanisms for managing and disbursing these community contributions. Experience from other resource sectors indicates a risk of elite capture or mismanagement of such funds if community-level governance structures are weak or if the definition of “community” itself is not clearly and inclusively established.

2.2. Tanzania: Legislative Frameworks, Institutional Roles (NEMC/NCMC, VPO-DoE), and Governance Dynamics

Tanzania has also taken steps to formalize its carbon market with the enactment of the Environmental Management (Control and Management of Carbon Trading) Regulations in 2022, which were subsequently amended in 2023.³ These regulations, complemented by the National Carbon Trading Guidelines of 2022 ³, establish the institutional arrangements and procedures for carbon projects. They define the roles of the Minister responsible for the environment, the Designated National Authority (DNA) – which is the Division of Environment (DoE) within the Vice President’s Office (VPO) – and local government authorities.³ The regulations outline project requirements, including alignment with NDCs, community involvement, transparency, adherence to safeguards, and a multi-step application process for project approval.³

More recently, the Environmental Management (Amendment) Act, 2024, was passed to further transform the carbon credit market, aiming to maximize revenue generation and address climate financing challenges.³⁰ This Act, which replaces the Environmental Management Act No. 20 of 2004 ³⁰, notably seeks to empower the National Carbon Monitoring Center (NCMC). The NCMC, currently housed at Sokoine University of Agriculture ³, is responsible for registering carbon trading projects and coordinating national MRV processes.³ The 2024 amendment aims to grant the NCMC legal recognition to enter into carbon trading agreements with financiers.³⁰

The National Environment Management Council (NEMC), established under the overarching Environmental Management Act, has a broad mandate for EIA enforcement, compliance review, and environmental monitoring.³⁵ While the specific carbon trading regulations place primary operational responsibility for carbon projects with the VPO-DoE (as DNA) and the NCMC (for registration and technical MRV aspects) ³, NEMC’s role in conducting EIAs for any carbon project with potential environmental impacts remains critical under its general environmental oversight mandate.

Benefit sharing under the Tanzanian regulations is complex. Regulation 34 of the 2022 Carbon Trading Regulations stipulates that for land-based projects, the “Managing Authority” (often a government entity in the case of public or community lands) is entitled to 61% of the gross revenues from carbon credit sales. Portions of this are then to be allocated for council-level and village/mtaa-level conservation and development activities. Additionally, the project proponent is required to pay 9% of the gross revenues to the DNA or National Focal Point, which is further distributed to the National Environmental Trust Fund and an agency responsible for subsidizing cooking energy.³ This regulatory stipulation appears to contrast with the practice of some prominent private developers like Carbon Tanzania, who state they provide a minimum of 61% of their initial sales revenue directly to their community partners.³⁷ Further complicating the picture, another source suggests that 69% of revenue from Verified Emission Reductions (VERs) is allocated to various government authorities, leaving businesses with only 31%.³⁹ This ambiguity surrounding the definition of “Managing Authority,” the calculation point of “gross revenue” versus “VER revenue” or “sales revenue,” and the ultimate flow of funds to communities creates significant uncertainty and potential for misalignment between policy intent and actual community benefit.

Despite these regulatory efforts and ambitious revenue targets ³⁰, Tanzania’s carbon trading sector faces severe implementation challenges. The Controller and Auditor General (CAG) report for 2023/24 painted a sobering picture: a vast majority of registered projects (52 out of 56) had stalled, leading to significantly underutilized potential and missed revenue (only 3% of projected earnings).⁴⁰ The CAG identified inadequate alignment of the regulatory framework with international agreements, limited public and private sector engagement, irregularities in project management and oversight by the VPO (including monitoring, evaluation, transparency in carbon credit pricing, and use of generated revenue), and significant delays in project review processes by the NCMC as key impediments.⁴⁰ Limited awareness among key stakeholders, including government officials and project developers, further exacerbates these issues.³ The CAG recommended elevating the NCMC to a fully-fledged, autonomous institution to enhance its effectiveness.⁴²

The significant gap between Tanzania’s regulatory ambitions and its implementation capacity is a central concern. The issues highlighted by the CAG suggest that the existing legal framework, while present, is insufficient without substantial improvements in institutional capacity (technical, financial, and administrative) within the VPO, NCMC, and among project proponents, alongside better coordination and heightened awareness across the board.

The NCMC’s role is particularly pivotal for project registration and MRV, and the 2024 Act’s intent to empower it is a positive step. However, its current operational constraints, including its placement under Sokoine University rather than as a more autonomous regulatory body, and reported staffing and processing delays, indicate that it may be under-resourced or inadequately positioned to fulfill its critical mandate effectively. An independent, well-resourced NCMC is essential for a credible carbon market.

The confusion surrounding benefit-sharing percentages and mechanisms in Tanzania is a major point of concern. The discrepancy between the regulatory text (61% of gross revenue to a “Managing Authority” plus 9% to the DNA) and the operational models of some successful developers (around 61% of their sales revenue directly to communities) needs urgent clarification. If the “Managing Authority” is typically a government body, the direct financial flow to communities could be substantially diluted after various administrative layers and other governmental allocations. This lack of clarity undermines transparency and could lead to community distrust and disputes, as evidenced by concerns in other contexts regarding opaque benefit flows.

2.3. Uganda: Legislative Frameworks, Institutional Roles (Ministry of Water & Environment, NEMA), and Governance Dynamics

Uganda has also recently advanced its regulatory framework for carbon markets. The National Climate Change Act, 2021, provides the overarching legal basis for climate action, explicitly including provisions for carbon trading mechanisms, covering both compliance and voluntary markets.⁴⁶ The Act designates the Ministry responsible for climate change, currently the Ministry of Water and Environment (MWE), with the authority to approve carbon projects.⁴⁷ Significantly, the Act treats carbon credits as tradable commodities, thereby granting them property rights and subjecting them to relevant tax laws.⁴⁷

To operationalize the Act, Uganda published the National Climate Change (Climate Change Mechanisms) Regulations, 2025.⁴⁶ These regulations establish a comprehensive framework for carbon projects, detailing a two-stage project approval process: an initial “letter of no objection” for feasibility studies, followed by full project approval based on detailed project design documents and benefit-sharing plans.⁴⁶ Verification of emission reductions must be conducted by internationally accredited third-party verifiers (e.g., Verra, Gold Standard).⁴⁶ The regulations also mandate a national registry for carbon credits and outline transparent procedures for their domestic and international transfer, with a strong emphasis on environmental integrity and equitable benefit sharing.⁴⁶

Institutionally, the Ministry of Water and Environment (MWE) is the lead entity. Its Carbon Credits Department is responsible for project approvals, and the Minister issues the letters of no objection and final project approvals.⁴⁷ The MWE is also tasked with the regular monitoring of registered carbon projects.⁴⁸ A Designated National Authority, housed within the MWE, is supported by a multi-sectoral technical committee to oversee carbon market activities and ensure compliance.⁴⁶

The National Environment Management Authority (NEMA) of Uganda plays a key role in the broader environmental governance landscape. It is an institution involved in monitoring atmospheric GHG concentrations ⁵² and holds the general mandate for conducting Environmental Impact Assessments (EIAs) and overall environmental supervision under the National Environment Act, 2019.⁵³ While the Climate Change Mechanisms Regulations assign the primary responsibility for carbon market project approval and oversight to the MWE ⁴⁶, NEMA’s statutory duty to conduct EIAs would apply to any carbon project that has potential environmental impacts. NEMA’s GHG monitoring role provides a broader context for national climate action but is distinct from the project-level carbon credit certification process outlined in the new regulations.

Historically, Uganda’s carbon market development has faced challenges, including internal fragmentation of climate change initiatives and issues with private sector engagement strategies.⁵⁵ There have also been concerns about intermediary exploitation within the largely unregulated VCM, where farmers reportedly received significantly lower prices for their carbon credits than prevailing market rates.⁵⁶ Weak policy enforcement and insufficient resources have also been noted as systemic problems.⁵⁷

The 2025 Regulations represent a significant step towards creating a robust and transparent carbon market in Uganda, aligning with international best practices such as those under Article 6 of the Paris Agreement. The framework’s emphasis on accredited verifiers, a national registry, and clear benefit-sharing plans provides a strong foundation. However, the ultimate success of this new framework will hinge on its effective implementation. This requires adequate resourcing for the MWE and its technical committees, transparent operational procedures, and diligent enforcement. The historical weaknesses in policy enforcement and resource allocation ⁵⁷ remain pertinent concerns that need to be addressed to ensure the new regulations achieve their intended impact. The efficiency of the MWE in managing the two-stage approval process, including the 24-month validity of the “letter of no objection” ⁴⁸, will also be crucial.

The mandate for internationally accredited verifiers ⁴⁶ is vital for ensuring the quality and credibility of Ugandan carbon credits in the global market. However, this reliance on international expertise could lead to higher transaction costs for project developers and may pose a barrier for smaller, local initiatives. A long-term strategy should therefore consider building domestic capacity for verification services to balance international credibility with local accessibility and affordability.

The new regulations’ focus on equitable benefit sharing and transparency is particularly important given past reports of intermediaries exploiting farmers in the VCM.⁵⁶ The effectiveness of these provisions in protecting vulnerable sellers, ensuring fair pricing, and guaranteeing that a just portion of carbon revenues reaches communities will be a critical measure of the new framework’s success. This will require not only clear regulations but also mechanisms for oversight of intermediary contracts and potentially legal support for communities during negotiations.

2.4. Comparative Analysis: Regulatory Strengths, Weaknesses, Gaps, and Opportunities for Harmonization

A comparative look at the carbon market frameworks in Kenya, Tanzania, and Uganda reveals both commonalities and distinct national approaches. All three countries have recently enacted or updated specific legislation to govern their carbon markets, are in the process of establishing national registries, have designated national authorities, and acknowledge the importance of international standards for verification. A common thread is the stated commitment to ensuring communities benefit from carbon projects, although the mechanisms and clarity vary. All three also grapple with challenges related to institutional capacity and effective implementation of their new frameworks.

Table 1: Comparative Overview of Key Carbon Market Regulations and Institutions

Feature	Kenya	Tanzania	Uganda
Key Legislation	Climate Change Act, 2016 (Amended 2023); Climate Change (Carbon Markets) Regulations, 2024 17	Environmental Management (Control and Management of Carbon Trading) Regulations, 2022 (Amended 2023); Environmental Management (Amendment) Act, 2024 3	National Climate Change Act, 2021; National Climate Change (Climate Change Mechanisms) Regulations, 2025 46
Designated National Authority (DNA)	National Environment Management Authority (NEMA) 17	Vice President’s Office – Division of Environment (VPO-DoE) 3	Ministry of Water and Environment (MWE) – Climate Change Department 46
National Registry	To be managed by NEMA; establishment mandated 17	NCMC responsible for maintaining a registry; 2024 Act aims to strengthen its role 3	Mandated under 2025 Regulations; to be established 46
Key Body for Project Approval	Cabinet Secretary (advised by DNA/NEMA & technical committee) 22	Minister responsible for Environment (VPO-DoE) 3	Minister of Water and Environment 48
Key Body for EIA/Env. Oversight	NEMA 22	NEMC (general EIA mandate); VPO-DoE & NCMC for carbon project specifics 3	NEMA (general EIA mandate); MWE for carbon project specifics 46
Mandated Community Benefit Sharing	Land-based: min 40% of aggregate earnings; Non-land-based: min 25% of aggregate earnings (on public/community land) via CDAs 18	Complex: 61% gross revenue to “Managing Authority” (often govt.) + 9% to DNA. Some developers report 61% of their sales revenue to communities 3	Project-specific Benefit Sharing Plans required; no fixed percentage in regulations reviewed 46
Status of Carbon Rights Definition	Not clearly defined in law; concerns raised 14	Not explicitly defined in reviewed regulations; focus on benefit sharing.	Not explicitly defined in reviewed regulations; carbon credits treated as tradable commodities.47

One of the most significant differences lies in the clarity and definition of carbon rights. Kenya’s framework has been explicitly criticized for lacking a clear definition, a fundamental gap that could disempower communities.¹⁴ While the regulations for Tanzania and Uganda focus on benefit sharing, the extent to which they secure underlying carbon ownership rights for communities on their lands requires deeper legal scrutiny of the full texts; the current emphasis on “benefit sharing” rather than “rights” may suggest a similar ambiguity.

Benefit sharing mechanisms also vary. Kenya has legislated specific minimum percentages (40% for land-based, 25% for non-land-based projects from aggregate earnings to communities) channeled through CDAs.¹⁸ Tanzania’s regulations stipulate a model where 61% of gross revenues go to a “Managing Authority” (which could be a government entity on public or community lands) and an additional 9% to the DNA.³ This contrasts with some prominent developers in Tanzania, like Carbon Tanzania, who report sharing approximately 61% of their sales revenue directly with community partners.³⁷ This discrepancy, along with other interpretations suggesting up to 69% of VER revenue goes to government authorities ³⁹, creates considerable confusion regarding the actual share reaching communities. Uganda’s new regulations emphasize the need for equitable benefit-sharing plans to be included in project design documents but do not appear to prescribe fixed national percentages in the snippets reviewed, potentially allowing for more project-specific arrangements.⁴⁶

The institutional setups also differ: NEMA is central in Kenya; the VPO-DoE (as DNA) and NCMC (for registration and technical MRV) are key in Tanzania; and the MWE leads in Uganda. The autonomy, resourcing, and technical capacity of these designated institutions will significantly influence market development and integrity in each country.

A critical dynamic observed is the tension between the pace of legislative enactment and the reality of implementation. Kenya moved swiftly to put its framework in place but faces concerns about the inclusivity of that process.¹⁴ Tanzania has had regulations for a couple of years, yet the CAG report reveals severe implementation deficits.⁴⁰ Uganda’s very recent and comprehensive regulations offer a promising blueprint, but their effectiveness will depend entirely on robust implementation and enforcement, areas where Uganda has faced past challenges.⁵⁷

Common gaps across the region include the lack of harmonized regional standards for critical aspects like project approval processes, MRV methodologies, and detailed operationalization of benefit-sharing mechanisms. There is also insufficient clarity on how “fair and equitable” benefit sharing will be ensured in practice beyond stated percentages or plans, particularly regarding the governance of community funds, dispute resolution mechanisms, and the definition of “community” itself to avoid elite capture. Mechanisms for addressing cross-border carbon projects or facilitating credit trading within the East African region are also underdeveloped.

These national efforts, while showing commitment, are unfolding somewhat independently. This “race to regulate” could inadvertently lead to a “patchwork of regulations” ⁵⁸, creating complexity and potential inconsistencies that might deter regional investors and complicate projects operating across borders. There is a risk of a “race to the bottom” if standards for project quality, environmental integrity, or community benefits are not consistently high across the region.

The “benefit sharing” conundrum also warrants closer attention. While specified percentages in Kenya and Tanzania provide a baseline, and Uganda’s requirement for benefit-sharing plans offers flexibility, the true measure of success lies in how these translate into tangible, equitably distributed benefits that genuinely improve community well-being. The critical factor is not just the percentage allocated but the power communities have in negotiating the terms, defining how benefits are utilized, and ensuring transparent and effective management of these resources. Without empowered community participation and robust local governance, even seemingly generous benefit-sharing arrangements can fail to achieve their intended outcomes.

Significant opportunities for harmonization and regional cooperation exist. Bodies like the East African Community (EAC) or specialized platforms such as the Eastern Africa Alliance on Carbon Markets and Climate Finance (EAA) ⁵⁶ could play a vital role. Developing common guidelines or minimum regional standards for project approval, MRV, and benefit sharing; facilitating regional learning and exchange of best practices; and potentially working towards a more integrated regional carbon market could reduce transaction costs, enhance market liquidity, and increase the region’s attractiveness to high-quality carbon finance.⁵⁸ Such collaboration is crucial to avoid regulatory fragmentation and to build a stronger collective position for East Africa in the global carbon economy.

Chapter 3: Community Engagement and Benefit Sharing in Carbon Projects

The effective engagement of local and indigenous communities and the establishment of fair, transparent, and equitable benefit-sharing mechanisms are critical for the success and sustainability of carbon projects. This chapter examines models of community participation and benefit sharing in Kenya, Tanzania, and Uganda, drawing on specific project examples.

3.1. Kenya: Participation Models, Benefit-Sharing Mechanisms (e.g., Kwale Blue Carbon – Mikoko Pamoja)

Kenya hosts several notable carbon projects with varying degrees of community engagement and benefit-sharing success. The Mikoko Pamoja project in Kwale County stands out as the world’s first community-led blue carbon initiative focused on mangrove conservation and restoration, selling credits through the Plan Vivo standard.⁶¹ This project protects approximately 290 acres of mangrove forest and generates around 3,000 carbon credits annually, which translates to offsetting about 2,500 tons of CO2​.⁶² The reported annual revenue of over $25,000 is channeled directly into community development initiatives, including improvements in water supply, sanitation, education facilities (schools, books), and healthcare (medication), as well as funding further conservation efforts.⁶¹ Community engagement and leadership are identified as crucial factors for the initiative’s success and sustainability.⁶⁴ However, even this lauded project has faced challenges, including issues with transparency, community conflicts, inadequate direct job opportunities, perceptions of insufficient income from carbon credits, and funding shortages for some community projects.⁶⁴

Building on the mangrove program’s success, the Wildlife Conservation Society (WCS) and the Kenya Marine Fisheries Research Institute (KMFRI) are leading a seagrass restoration project in Vanga and Jimbo, Kwale County.⁶³ This initiative also uses the Plan Vivo system and aims to protect at least 300 hectares of seagrass beds, with income generated supporting similar community benefits in water, sanitation, education, and conservation.⁶³

In contrast, the Northern Kenya Rangelands Carbon Project (NKRCP), one of the world’s largest soil carbon removal projects, has faced significant challenges.⁶⁵ This project, managed by the Northern Rangelands Trust (NRT), involves modified livestock grazing practices across vast areas of communally-owned land. It has attracted prominent corporate buyers like British Airways, Netflix, and Beiersdorf.⁶⁵ However, a landmark court ruling in Isiolo County in January 2025 favored a community group that contested the establishment of conservancies by NRT, citing the failure of county and national authorities to facilitate the registration of their unregistered community lands.⁶⁵ The project has also been marred by accusations of human rights abuses and the illegal operation of armed rangers within the conservancies.⁶⁵ Namati, a legal empowerment organization, is currently supporting 27 pastoral communities in renegotiating more equitable revenue-sharing agreements with the NKRCP.⁶⁷ These contrasting experiences between the smaller, community-driven blue carbon projects in Kwale and the large-scale terrestrial NKRCP suggest that project scale, governance complexity, and the nature of community engagement profoundly influence outcomes and the realization of community benefits. The success of Mikoko Pamoja underscores the potential of genuinely community-led initiatives, while the NKRCP’s struggles highlight the perils of top-down approaches on communal lands without adequate FPIC and secure tenure.

Kenya’s legal framework for benefit sharing has evolved. The Climate Change (Amendment) Act, 2023, mandates Community Development Agreements (CDAs), requiring projects on community land to contribute at least 25% of the previous year’s aggregate earnings to the community.¹⁸ The Climate Change (Carbon Markets) Regulations, 2024, further specify this, setting the minimum at 40% of aggregate earnings for land-based projects and 25% for non-land-based projects on public or community land.²² Historically, benefit sharing in land-based projects was often determined by contractual agreements between parties, while non-land-based projects, such as improved cookstove initiatives, typically used carbon revenue to subsidize the cost of the low-carbon products for households.¹⁹

Organizations like Vi Agroforestry adopt a model where carbon credits are often a co-benefit rather than the primary driver. They prioritize knowledge dissemination on Sustainable Agricultural Land Management (SALM) practices, integrate gender-transformative strategies, and conduct conflict sensitivity assessments to ensure fair and inclusive benefits.⁶⁸

The introduction of legislated minimum benefit-sharing percentages (25-40%) offers a legal baseline for communities. However, this does not automatically guarantee fairness or sufficiency. The definition of “aggregate earnings” and the transparency of its calculation are critical. If project costs are inflated or revenues underreported before this calculation, the actual benefit accruing to communities could be minimal. Moreover, the CDA model itself, as critiqued by Namati ¹⁴, might still place communities in a weaker negotiating position if they lack the capacity or autonomy to effectively shape these agreements. A fixed percentage might also not be optimal for all project types or cater to diverse community needs and priorities.

3.2. Tanzania: Participation Models, Benefit-Sharing Mechanisms (e.g., Kilombero Valley/Tanga Mangroves REDD+/Agroforestry)

Tanzania showcases several carbon projects that emphasize community participation and aim for direct benefit sharing. Carbon Tanzania is a prominent project developer with initiatives like the Yaeda-Eyasi Landscape Project (Hadza and Datooga communities), Makame Savannah Project (Maasai communities), and Ntakata Mountains Project.³⁷ These projects are built on recognizing traditional ecological knowledge and supporting communities in developing and enforcing land use plans, often through Community Certificates of Right of Occupancy (CCROs), Wildlife Management Areas (WMAs), or Village Land Forest Reserves (VLFRs).³⁷ Carbon Tanzania guarantees its community partners a minimum of 61% of the initial sales revenue from carbon credits, a figure that aligns with recent national regulations.³⁷ This revenue is managed transparently through existing community governance structures and is used to fund healthcare facilities, education (school fees, infrastructure), local businesses, and salaries for Village Game Scouts (VGS) who protect the forests.³⁷ In 2022, these projects reportedly transferred nearly US$3 million to communities, directly benefiting over 125,000 people ⁷¹, and this figure rose to US$6.9 million in 2023.⁷²

Similarly, MJUMITA (Mtandao wa Jamii wa Usimamizi wa Misitu Tanzania – Tanzania Community Forest Conservation Network) implements REDD+ projects in Lindi, Kilosa, and Mpwapwa districts.⁷³ These projects focus on empowering rural communities by helping them secure forest tenure through participatory land use planning and establishing community-based forest management systems. MJUMITA ensures that at least 60% of the revenue from carbon credit sales goes to the participating communities. These funds are typically used for a combination of individual cash dividends, which help residents improve farm productivity or invest in new livelihoods, and community development projects such as schools, health clinics, and water wells.⁷³ MJUMITA’s projects are verified under the Verified Carbon Standard (VCS) and have achieved Gold Level validation under the Climate, Community, and Biodiversity Standards (CCBS) for exceptional biodiversity, community, and climate adaptation benefits.⁷³

In the Kilombero Valley, the Kilombero and Lower Rufiji Wetlands Ecosystem Management Project (KILORWEMP), though not primarily a carbon project, aimed to strengthen devolution in natural resource management and establish CBNRM institutions like WMAs and VFRs (e.g., Mtanza Msona VFR).⁷⁶ MJUMITA provided capacity building, and the Mtanza Msona VFR reportedly generated TZS 115 million from sustainable timber harvesting, with portions allocated to community development.⁷⁶ However, KILORWEMP faced challenges such as illegal harvesting and a need for more business-oriented management within village institutions.⁷⁶ While these initiatives provide context, the direct carbon market engagement in Kilombero seems less developed compared to other areas. The Landesa study on the Kilombero Sugar Company Ltd. (KSCL) further contextualizes the region, highlighting issues of land scarcity, tenure insecurity, and the need for gender-sensitive land use planning and equitable benefit sharing in agricultural out-grower schemes, which are relevant for any resource-based community project in the valley.⁷⁷ A study on farmers’ attitudes in Kilombero also indicated that land ownership and agricultural expansion remain key aspirations for smallholders, emphasizing the need for well-structured participatory approaches in any restoration or land-use planning initiatives.⁷⁹

For Tanga mangrove areas, the transboundary IKI-Kwale-Tanga project involves engaging various stakeholders, including local communities, in the sustainable management of coastal ecosystems with a focus on the financial viability of mangrove conservation and carbon credits.⁸⁰ The Bahari Mali project, implemented by IUCN in Tanga and Pemba, supports sustainable blue livelihoods and marine ecosystem conservation, with a particular focus on women and youth.⁸¹ While these projects are active in mangrove conservation and livelihood improvement, their specific carbon credit generation and benefit-sharing details are less elaborated in the provided materials compared to the REDD+ projects. Generally, community-based mangrove management in Tanzania shows promise, but there’s a need to strengthen local government institutional effectiveness and enhance community involvement.⁸²

A significant counter-narrative emerges from experiences of Maasai communities in Northern Tanzania involved in large-scale soil carbon projects, such as the Longido and Monduli Rangelands Carbon Project (reportedly funded by Volkswagen ClimatePartners) and The Resilient Tarangire Ecosystem Project (backed by The Nature Conservancy).¹⁵ These communities have raised serious concerns about the violation of their land rights, lack of Free, Prior, and Informed Consent (FPIC), opaque contractual agreements (some anticipated to last 40 years), and negative impacts on their traditional pastoral livelihoods due to restrictions on grazing patterns.¹⁵ This situation underscores that the model of engagement and the transparency of project developers are critical. Projects led by developers like Carbon Tanzania and MJUMITA, which emphasize long-term partnerships, capacity building, and clear high-percentage revenue sharing directly with communities, appear to foster greater trust and deliver more tangible and equitably distributed benefits. This contrasts sharply with situations where externally driven projects with unclear terms and perceived threats to land rights lead to significant conflict and community disempowerment.

The security of land tenure is a foundational element for successful and equitable carbon projects in Tanzania. Many projects, like those by Carbon Tanzania and MJUMITA, explicitly incorporate activities to secure community land tenure (e.g., through CCROs, VLFRs).³⁷ The conflicts observed in Maasai territories are deeply intertwined with fears of land alienation, highlighting that carbon projects cannot achieve equitable or sustainable outcomes if underlying land tenure issues are not resolved or are, in fact, worsened by project interventions.

The ambiguity surrounding benefit sharing percentages in Tanzania, as discussed in Chapter 2.2, remains a critical issue. The official regulations ³ describe a system where 61% of gross revenue goes to a “Managing Authority” (often government-linked) plus 9% to the DNA. However, successful developers like Carbon Tanzania and MJUMITA report channeling around 60-61% of their sales revenue directly to communities.³⁷ If the “Managing Authority” in the regulations is predominantly a government entity, the direct financial flow to communities could be significantly less than the 61% figure suggests, after administrative diversions. This lack of clarity can breed mistrust and needs urgent official clarification to ensure genuine transparency and equitable benefit flows to the communities who are the primary stewards of the resources generating carbon credits.

3.3. Uganda: Participation Models, Benefit-Sharing Mechanisms (e.g., Mt. Elgon/Albertine Rift Community Forestry – TGB)

Uganda has several well-documented community-focused carbon projects. The Trees for Global Benefits (TGB) programme, coordinated by ECOTRUST, is a long-running cooperative agroforestry and reforestation scheme operating in the Albertine Rift, Mt. Elgon, and Northern Uganda regions.⁸⁸ Certified under the Plan Vivo standard, TGB involves over 41,898 smallholder farming households.⁸⁸ A key feature of TGB is its benefit-sharing model, where 60% of the carbon credit revenue is returned directly to the participating farming communities, either in cash or as in-kind benefits.⁹⁰ These benefits contribute to improved incomes, enhanced land productivity through practices like soil enrichment and fruit tree planting, increased food security, payment of school fees, investment in farming tools and livestock, access to finance, and the adoption of energy-efficient cookstoves.⁸⁸ The TGB programme also utilizes the Gender Action Learning System (GALS) to promote equitable decision-making and benefit distribution within households.⁹⁰ To date, the project has reportedly generated over $6 million for participating communities.⁹¹

The MyClimate project, “Small-Scale Farmers Reforest Forests in Uganda,” also operating in the Albertine Rift and Mt. Elgon regions, is closely linked with ECOTRUST and TGB.⁹⁴ It focuses on community mobilization for forest protection and rehabilitation, delivering similar multiple benefits such as income generation, funds for school fees, support for alternative livelihoods like beekeeping and crafts, and access to micro-loans. This project also employs GALS in its community engagement.⁹⁴ It has reportedly paid over USD 6.2 million to 37,817 farmers and reforested 24,817 hectares.⁹⁴

Another impactful model is the Simoshi social enterprise, which focuses on distributing cleaner, more efficient cookstoves in Ugandan schools.⁶ Revenue from carbon credits enables Simoshi to install these institutional cookstoves and maintain them for a decade. This leads to reduced firewood consumption (saving forests and money for schools), lower GHG emissions, and significantly improved indoor air quality, benefiting the health of students and staff. The project has a verified contribution to nine UN Sustainable Development Goals.⁶

The Uganda Carbon Bureau (UCB) positions itself as a facilitator of “fair trade access to carbon finance,” aiming to ensure that the full value of Certified Emission Reductions (CERs) remains with the projects.⁹⁶ UCB develops Programmes of Activities (PoAs), such as the multi-country “Improved Cook Stoves for East Africa” (ICSEA), to aggregate smaller initiatives and make carbon finance more accessible.⁹⁶

Uganda’s National Climate Change (Climate Change Mechanisms) Regulations, 2025, underscore the importance of equitable benefit sharing and mandate the inclusion of detailed benefit-sharing plans in project approval applications.⁴⁶ The national REDD+ strategy similarly aims for equitable sharing of both carbon and non-carbon benefits with local and indigenous communities.⁹⁹ At the project level, Payment for Ecosystem Services (PES) agreements are envisioned to define activities and the nature of benefit sharing (monetary or non-monetary).¹⁰⁰

Despite these positive models and regulatory intentions, the TGB programme has faced criticism. A case study by the Global Forest Coalition (GFC) alleged that TGB constitutes greenwashing, negatively impacts food security by converting agricultural land to tree plots, provides insufficient or delayed payments, and that farmers feel trapped in long-term contracts, with women being particularly marginalized. The GFC also claimed ECOTRUST failed to adequately inform participants about project technicalities.¹⁰¹ However, an independent review by Earthly (an organization that partners with TGB) largely refuted these claims, acknowledging some past payment delays and isolated food security incidents (which they state are addressed through the agroforestry model promoting food and tree crops together) but citing independent audits, the 60% revenue share, use of GALS, and provision of contract summaries in local languages as evidence of the project’s integrity and positive impact.⁹⁰

The TGB model, involving the aggregation of tens of thousands of smallholder farmers, demonstrates the potential to make carbon markets accessible to this demographic, reducing transaction costs and empowering individuals. However, the GFC’s critique, even if contested, highlights the immense managerial and logistical complexities involved. Ensuring genuine FPIC, maintaining transparent communication, delivering timely payments, and effectively addressing potential food security trade-offs across such a large and dispersed group of participants requires exceptionally robust local facilitation, accessible grievance redressal mechanisms, and continuous adaptive management.

The “fair trade carbon” ethos promoted by the Uganda Carbon Bureau and the significant community revenue share in the TGB model represent positive approaches to benefit distribution. Nevertheless, reports of widespread exploitation by other, less scrupulous intermediaries in Uganda’s VCM, where farmers receive only a small fraction of the credit value ⁵⁶, indicate high variability in market practices. The new 2025 Regulations will need to be effectively enforced to monitor intermediaries and ensure that project-level benefit-sharing plans are genuinely fair and implemented as approved.

The conflicting narratives surrounding the TGB project’s impact underscore the challenge of objectively assessing community benefits and the critical importance of independent, credible, and participatory monitoring and evaluation systems. These systems must go beyond carbon accounting to rigorously assess socio-economic outcomes and community perceptions. Different stakeholders can interpret project impacts very differently, emphasizing the need for M&E processes that are inclusive of community voices and perspectives.

3.4. The Role of Local Cooperatives and Village Forest Associations

Across Kenya, Tanzania, and Uganda, local community-based institutions such as cooperatives, Community-Based Organisations (CBOs), and Village Forest Associations (VFAs) or their equivalents (e.g., Village Natural Resource Committees, Beach Management Units) play a consistently vital role in the interface between carbon projects and local populations.

In Kenya, organizations like Vi Agroforestry actively foster the development of farmer groups to facilitate collective participation and benefit management.⁶⁸ The Green Climate Fund project FP255, focused on agricultural value chains in the Lake Region Economic Bloc, explicitly emphasizes the empowerment of agri-food cooperatives as pivotal agents for rural transformation and climate resilience.¹⁰² The success of the Mikoko Pamoja blue carbon project is also rooted in its community-based management structure.⁶¹

In Tanzania, project developers like Carbon Tanzania work through existing community social and governance structures for the transparent allocation of carbon revenues.³⁷ MJUMITA, itself a network of community forestry groups, is instrumental in establishing community-based forest management systems and strengthening local governance capacities, with village natural resource committees playing a direct role.⁷³ The KILORWEMP project also focused on establishing and supporting various CBNRM institutions, including WMAs, VFRs, and BMUs.⁷⁶

In Uganda, the Trees for Global Benefits (TGB) programme is structured as a cooperative carbon offsetting scheme, which enables group certification and collective marketing of carbon credits for smallholder farmers.⁸⁸ The project actively works to strengthen community empowerment by organizing producer associations and CBOs, which serve as platforms for collective decision-making and the pursuit of joint income-generating activities.⁹¹

These local institutions are essential for several reasons. They provide a practical mechanism for scaling up community involvement, allowing project developers to engage with organized groups rather than thousands of individuals, thereby reducing transaction costs. They can enhance equity by providing a platform for collective bargaining, ensuring that community voices are heard in negotiations with project developers, and potentially offering a more democratic means of managing and distributing benefits. Furthermore, they contribute to sustainability by building local ownership and management capacity for the natural resources upon which the carbon projects depend.

However, while vital, the operational effectiveness and governance capacity of these local institutions can themselves present a bottleneck. As observed in Tanzania’s KILORWEMP project, challenges such as frequent changes in leadership within village institutions or insufficient financial management skills can hinder their ability to effectively manage resources and benefits.⁷⁶ Therefore, external support for capacity building – focusing on governance, financial literacy, transparency, accountability, and conflict resolution – is often a necessary component of carbon projects to ensure these local bodies can adequately represent community interests and manage benefits equitably. Without such strengthening, even well-intentioned benefit-sharing schemes can be undermined by weak local institutional performance or elite capture.

3.5. Comparative Analysis: Ensuring Fair, Transparent, and Equitable Benefit Sharing

Ensuring that benefits from carbon projects are shared fairly, transparently, and equitably with participating communities is a cornerstone of ethical and sustainable carbon market development in East Africa. All three countries’ policies and many active projects articulate a commitment to community benefits. Successful initiatives often combine direct financial payments to households or community funds with investments in essential social infrastructure (such as schools, water systems, and health clinics) and support for alternative, sustainable livelihoods. Across the board, genuine community participation in decision-making processes and transparency in revenue management are cited as crucial for achieving equitable outcomes.

However, the approaches to codifying and implementing benefit sharing differ significantly. Kenya has moved towards legislating specific minimum percentages (40% for land-based and 25% for non-land-based projects on public/community land) to be channeled through Community Development Agreements (CDAs). Tanzania’s regulations outline a more complex model involving a 61% share of gross revenue to a “Managing Authority” (often government-affiliated when on public or community land) plus an additional 9% to the DNA; however, prominent developers like Carbon Tanzania and MJUMITA report implementing a model where around 60-61% of their sales revenue is shared directly with communities. This divergence highlights potential ambiguities in the application of Tanzanian regulations and the interpretation of “revenue” at different stages of the value chain. Uganda’s new regulations, while strongly emphasizing the need for equitable benefit-sharing plans as part of project approval, do not appear to prescribe fixed national percentages in the reviewed materials, allowing for more project-specific negotiated agreements.

Despite these frameworks, significant challenges persist in ensuring truly fair, transparent, and equitable benefit sharing. A primary hurdle is guaranteeing Free, Prior, and Informed Consent (FPIC). While FPIC is increasingly recognized as a standard (e.g., Namati’s successful advocacy for its inclusion in Kenyan regulations ⁶⁷, and its requirement under international standards like Verra ¹⁰³), its practical and meaningful implementation on the ground remains a major challenge. This is particularly true for large-scale projects or those involving communities with limited prior exposure to complex legal and financial agreements, as evidenced by the serious concerns raised by Maasai communities in Tanzania ¹⁵ and some critiques of the TGB project in Uganda.¹⁰¹ Effective FPIC requires more than a procedural checklist; it demands culturally appropriate engagement, provision of comprehensive information in accessible local languages, sufficient time for internal community deliberation, and an environment free from pressure or coercion. The absence of clearly defined “carbon rights” in Kenya ¹⁴, and potentially similar ambiguities in Tanzania and Uganda, further complicates the FPIC process, as communities may not be negotiating from a position of clear ownership over the resource generating the credits.

Elite capture of benefits at the community level is another pervasive risk. Even when substantial revenues are directed towards communities, intra-community power dynamics, weak local governance structures, or lack of financial transparency can lead to benefits being disproportionately accessed by more powerful or well-connected individuals, leaving marginalized groups behind. Managing community expectations regarding the quantum and timing of benefits is also crucial, as carbon revenues can be variable and may take years to materialize.

Transparency in revenue calculation is essential. Vague definitions of terms like “aggregate earnings” (Kenya) or inconsistencies in how “sales revenue” or “gross revenue” (Tanzania) are determined and audited can create opportunities for project developers or intermediaries to minimize the actual share flowing to communities.

Finally, the very definition of “community” can be contentious, particularly in areas with overlapping customary claims or diverse ethnic groups. Similarly, what constitutes a “benefit” can vary widely. While cash payments are often preferred for immediate needs, investments in communal infrastructure or livelihood diversification projects may offer more sustainable long-term advantages. A one-size-fits-all approach to benefit sharing is unlikely to be equitable. Processes such as participatory wealth ranking, community-led needs assessments, and inclusive decision-making forums are critical for tailoring benefit-sharing packages to specific local contexts and ensuring they address the priorities of different segments within the community, including women, youth, and other vulnerable groups. Organizations like Vi Agroforestry in Kenya incorporate conflict sensitivity assessments into their project design to proactively address potential disputes over benefit distribution.⁶⁸

Chapter 4: Dominant Carbon Business Models and Market Dynamics

The carbon markets in Kenya, Tanzania, and Uganda are characterized by a variety of business models, each with distinct operational modalities, success factors, and challenges, particularly concerning community benefits and environmental integrity.

4.1. Overview of Prevailing Models: REDD+, Blue Carbon, Agroforestry, Soil Carbon Farming

Several carbon business models are prevalent across East Africa, largely focusing on the land use and forestry sectors, but also encompassing energy and waste.

REDD+ (Reducing Emissions from Deforestation and Forest Degradation) projects aim to generate carbon credits by preventing deforestation and forest degradation, thereby protecting existing carbon stocks and often promoting sustainable forest management.¹¹ This model has historically been a dominant nature-based approach in Africa.¹⁰⁴

• In Tanzania, REDD+ has seen significant activity, with numerous pilot projects and a national REDD+ strategy that emphasizes Participatory Forest Management (PFM) involving Joint Forest Management (JFM) and Community-Based Forest Management (CBFM).⁷⁵ Prominent examples include projects by MJUMITA ⁷³ and Carbon Tanzania.³⁷
• Uganda also has a National REDD+ Strategy and Action Plan aimed at addressing deforestation drivers through policy approaches that promote sustainable forest management and community involvement.⁹⁹
• Kenya hosts REDD+ projects such as the Kasigau Corridor REDD+ Project.¹⁰⁶ Challenges associated with REDD+ globally and in the region include ensuring the additionality of emission reductions (i.e., proving that the forest protection would not have happened anyway), guaranteeing the permanence of carbon storage, accurately accounting for carbon, preventing leakage (where deforestation is displaced to areas outside the project boundary), and ensuring equitable benefit sharing with local communities who are often the forest stewards.¹⁰⁷ Recent credibility concerns have impacted REDD+ credits in the VCM ⁹, prompting standards like Verra to develop new methodologies (e.g., VM0048) aimed at improving baseline setting and overall integrity.¹⁰³

Blue Carbon projects focus on coastal and marine ecosystems, particularly mangroves, seagrass meadows, and salt marshes, which are highly effective at sequestering and storing carbon – often at rates significantly higher than terrestrial forests.¹¹⁴ These projects typically involve the conservation of existing blue carbon ecosystems and the restoration of degraded ones. Blue carbon credits can command premium prices in the VCM, often ranging from $15 to $35 per credit, compared to $8 to $10 for some generic REDD+ credits, partly due to their significant biodiversity and community co-benefits.¹¹⁴

• Kenya is a pioneer in community-based blue carbon with the Mikoko Pamoja mangrove project (Plan Vivo certified) ⁶¹ and the WCS-led seagrass restoration project in Kwale.⁶³
• Tanzania has active mangrove conservation and restoration initiatives in the Tanga region and Zanzibar, such as the HIMA REDD+ Program by Terra Global focusing on mangroves.⁸⁰ Despite their potential, blue carbon projects can face high development costs and require specialized MRV methodologies.¹⁰⁴

Agroforestry Offsets involve integrating trees and shrubs into agricultural landscapes. This model offers multiple benefits, including carbon sequestration in biomass and soils, improved soil health and fertility, enhanced biodiversity, crop diversification, and increased income for farmers from tree products (fruits, nuts, timber) in addition to carbon revenues.

• The Trees for Global Benefits (TGB) programme in Uganda, coordinated by ECOTRUST and certified by Plan Vivo, is a large-scale and long-running example of an agroforestry carbon project involving tens of thousands of smallholder farmers.⁸⁸
• In Kenya, Farm Africa, in partnership with Acorn, Rabobank, and AGRA, implements an agroforestry project in Embu and Tharaka Nithi counties ¹¹⁸, and Solidaridad runs a Plan Vivo certified project with smallholder coffee farmers.¹¹⁹
• Tanzania also has agroforestry initiatives, such as the Kaderes project supporting coffee farmers in Karagwe and Kyerwa districts under Plan Vivo.¹²⁰

Soil Carbon Farming aims to increase the amount of organic carbon stored in agricultural soils through practices such as improved grazing land management, no-till farming, cover cropping, and the application of organic amendments.

• The Northern Kenya Rangelands Carbon Project (NKRCP) is a prominent, large-scale example focusing on modified livestock grazing practices in arid and semi-arid lands.⁶⁵ This model faces challenges related to the accurate and cost-effective MRV of soil carbon changes over large areas, the permanence of sequestered carbon (as soil carbon can be quickly lost if beneficial practices are discontinued), and ensuring that projects genuinely benefit pastoralist communities whose traditional land use patterns may be affected.⁶⁶

Beyond these land-based models, other carbon business models in the region include renewable energy projects (such as geothermal in Kenya ¹⁷, solar, and wind initiatives), energy efficiency projects (e.g., the distribution of improved cookstoves in Uganda by Simoshi ⁶ and UCB ⁹⁶, and in Kenya ¹²¹), and waste management projects that reduce methane emissions from landfills or convert waste to energy.²²

The prevalence of land-based models (REDD+, agroforestry, soil carbon, blue carbon) across East Africa underscores a critical dependency: the security of land and resource tenure for local communities. These models are intrinsically linked to how land is used, managed, and owned. In contexts where community land rights are insecure, unrecognized, or contested – as highlighted by the challenges faced by the NKRCP in Kenya ⁶⁵ and pastoralist communities in Tanzania ⁸⁴ – carbon projects can exacerbate vulnerabilities and lead to conflict, undermining both social equity and the long-term environmental integrity of the initiatives.

Furthermore, a distinction can be observed between projects primarily driven by their co-benefits and those that are more singularly focused on carbon sequestration. Models like agroforestry, which directly enhance food security and diversify farmer incomes ⁸⁸, blue carbon projects that support fisheries ⁶¹, and improved cookstove projects that yield health and time-saving benefits ⁶, tend to foster stronger community buy-in and demonstrate greater resilience. These tangible, often immediate, local co-benefits provide value to communities irrespective of carbon price fluctuations. Conversely, projects perceived as “pure” carbon plays, where the primary community benefit is the carbon payment itself, may be more vulnerable to waning community support or project abandonment if carbon revenues are delayed, insufficient, or inequitably distributed.

4.2. Success Factors and Challenges for Different Models in Delivering Community Income and Environmental Integrity

The success of carbon business models in East Africa hinges on a complex interplay of factors that ensure both meaningful community income and robust environmental integrity.

Key Success Factors:

• Strong Community Participation and Ownership: Genuine and continuous involvement of local communities in project design, implementation, monitoring, and decision-making regarding benefit sharing is paramount. Examples like Mikoko Pamoja in Kenya ⁶⁴, Carbon Tanzania’s projects ³⁷, MJUMITA’s initiatives in Tanzania ⁷³, and Uganda’s TGB programme ⁸⁸ consistently demonstrate that community ownership fosters project sustainability and equitable outcomes.
• Clear and Secure Land and Carbon Rights: Unambiguous legal recognition of community land tenure and their rights to the carbon benefits derived from their land is fundamental. This empowers communities in negotiations and ensures long-term project viability.¹⁴
• Transparent and Equitable Benefit-Sharing Mechanisms: Clearly defined, easily understandable, and fairly implemented mechanisms for distributing carbon revenues are crucial. Community control over the management and use of these funds, as seen in models like Carbon Tanzania’s 61% direct share ³⁷ and TGB’s 60% to farmers ⁹², builds trust and ensures benefits address local priorities.
• Delivery of Tangible Co-benefits: Projects that generate substantial non-carbon benefits—such as improved livelihoods, enhanced food security, better access to health and education, and biodiversity conservation—tend to have stronger community support and greater overall impact. This is evident in successful agroforestry, blue carbon, and improved cookstove projects across the region.
• Robust MRV and Adherence to High-Integrity Standards: Utilizing credible international standards like Verra, Gold Standard, or Plan Vivo for project validation, verification, and credit issuance is essential for maintaining environmental integrity and attracting reputable buyers.¹⁷
• Effective Local Institutions: Well-functioning Community-Based Organisations (CBOs), cooperatives, Village Forest Associations (VFAs), or similar local governance structures are critical for managing projects, distributing benefits, and representing community interests effectively.³⁷
• Long-term Partnerships and Capacity Building: Sustained engagement and investment in building local technical and managerial capacity by project developers or supporting organizations contribute significantly to project success and local empowerment, as exemplified by Vi Agroforestry ⁶⁸ and ECOTRUST.⁸⁸

Key Challenges:

• Weak Governance and Regulatory Uncertainty: Inconsistent or poorly enforced regulations, as discussed in Chapter 2, create an unstable environment for carbon projects, deterring investment and posing risks to project integrity.
• Land Tenure Insecurity: This remains a major impediment, particularly for extensive land-based projects like REDD+ and soil carbon initiatives, often leading to conflicts and undermining community rights.⁶⁵
• Low Carbon Prices and Market Volatility: Fluctuations in global carbon prices can render projects economically unviable, especially if communities are heavily reliant on carbon revenue as their primary benefit.⁹
• High Transaction Costs: The costs associated with project development, certification under international standards, and ongoing MRV can be prohibitively high, especially for smaller-scale community-led projects.²
• MRV Complexity and Cost: Accurately measuring, reporting, and verifying carbon sequestration or emission reductions can be technically challenging and expensive, particularly for diffuse sources like soil carbon or complex ecosystems in some REDD+ projects.⁶⁶
• Elite Capture and Inequitable Benefit Sharing: There is a persistent risk that benefits intended for the broader community may be captured by local elites or inequitably distributed, failing to reach the most vulnerable households.¹¹
• Lack of FPIC and Insufficient Community Awareness: Projects initiated without genuine Free, Prior, and Informed Consent, or where communities do not fully understand the terms and implications, are prone to failure and can lead to exploitation.¹⁴
• Environmental Integrity Concerns: Issues of additionality (proving the project leads to emission reductions beyond what would have happened anyway), permanence (ensuring sequestered carbon remains stored long-term), and leakage (emission displacement) continue to challenge the credibility of some carbon projects, particularly certain REDD+ and soil carbon initiatives.⁹

Achieving a “triple win”—delivering tangible community income, ensuring robust environmental integrity, and maintaining financial viability for project developers—is a complex undertaking that demands a long-term, ethical commitment from all stakeholders. The successful examples from the region, such as Mikoko Pamoja, Carbon Tanzania’s REDD+ projects, MJUMITA’s community forestry, and Uganda’s TGB agroforestry programme (despite some critiques), demonstrate that this is achievable. However, these successes are consistently characterized by deep and sustained community engagement, fair and transparent benefit-sharing arrangements, and rigorous technical design adhering to high-integrity standards. These elements are not merely desirable add-ons but core components of successful and sustainable carbon business models.

There is a discernible trend in the VCM where buyers are increasingly seeking carbon credits that offer more than just emission offsets; they are looking for compelling narratives of community development, biodiversity conservation, and other sustainable development co-benefits.¹ This demand for “co-benefits” can act as a powerful incentive for project developers to design and implement higher-quality projects that genuinely integrate social and environmental safeguards. Such projects may command premium prices or attract ethically-minded investors, potentially creating a virtuous cycle where market forces reward projects that deliver holistic and verifiable positive impacts.

Table 2: Dominant Carbon Business Models in East Africa – Examples, Community Income Evidence, and Environmental Integrity Assessment

Business Model	Example Project(s) & Country	Documented Community Income Benefits (Qualitative/Quantitative)	Key Environmental Integrity Aspects (Standard used, additionality/permanence considerations, key challenges)	Overall Success/Challenge Rating
REDD+	Carbon Tanzania projects (Yaeda-Eyasi, Makame, Ntakata), MJUMITA projects (Lindi, Kilosa) – Tanzania 37	Significant direct revenue share (60-61% of sales) to communities; funds for health, education, VGS salaries, local businesses, individual dividends. Millions USD annually. 37	VCS, CCBS (Gold Level for MJUMITA). Focus on community-based forest management, land use plans. Challenges: baseline accuracy, permanence, leakage, historical credibility issues for REDD+ globally. 9	Largely Successful (for these specific developer-led models with strong community focus)
	Kasigau Corridor REDD+ Project – Kenya 106	Over 300 jobs created, financing for education and healthcare. 106	VCS. Wildlife Works.	Mixed (Initial success, but broader REDD+ faces scrutiny)
Blue Carbon (Mangroves/ Seagrass)	Mikoko Pamoja (Kwale) – Kenya 61	World’s first community-led. >$25,000/year for community projects (water, schools, health). 62	Plan Vivo. Strong community ownership, direct conservation-linked benefits. Challenges: transparency issues, small scale income. 61	Successful (model for community blue carbon)
	WCS Seagrass Restoration (Kwale) – Kenya 63	Income for water, sanitation, education, conservation. 63	Plan Vivo. Builds on mangrove project.	Promising (early stages, builds on success)
	HIMA REDD+ (Zanzibar, near Tanga) – Tanzania (Terra Global) 117	Improved livelihoods (esp. women), alternative income (beekeeping), strengthened land use rights. 117	Aims for climate finance, alignment with NDC. Focus on mangrove conservation & regeneration.	Promising (revitalized program)
Agroforestry Offsets	Trees for Global Benefits (TGB) – Uganda (ECOTRUST) 88	60% carbon revenue to farmers; income, food security, school fees, improved land productivity. >$6M total to communities. 91	Plan Vivo. Long-running, large-scale smallholder aggregation. Critiques exist regarding food security trade-offs and payment timeliness in some cases. 88	Largely Successful (significant scale & benefits, but with management complexities & critiques)
	Farm Africa Agroforestry – Kenya (Acorn, Rabobank, AGRA) 118	80% carbon revenue to farmers; school fees, farm expansion, alternative income. Improved yields, reduced fertilizer use. 118	CRUs generated. Focus on climate-smart techniques, financial literacy. 118	Successful (demonstrated financial & environmental benefits)
Soil Carbon Farming	Northern Kenya Rangelands Carbon Project (NKRCP) – Kenya (NRT) 65	Benefit sharing via CDAs (min 25-40% of aggregate earnings legislated). Actual flow and equity disputed; Namati supporting renegotiation. 18	Modified grazing. VCS. Significant concerns about land rights, FPIC, human rights abuses, map accuracy, and actual carbon benefits. 65	Highly Challenged (significant governance, rights, and integrity concerns)
Improved Cookstoves / Household Energy	Simoshi (Schools) – Uganda 6	Carbon revenue funds stove installation & 10-yr maintenance. Schools save money on fuel; health benefits. 6	Gold Standard. Verified SDG impacts. Addresses indoor air pollution. 6	Successful (clear co-benefits, sustainable model)
	UCB PoAs – Uganda/East Africa 96	Aims for “fair trade carbon finance,” 100% credits to stove suppliers (after fees) to lower prices. 98	CDM/Gold Standard PoAs. Stove neutral. 98	Promising Model (focus on equitable finance access)
	Burnstoves – Kenya 122	Reduces fuel consumption by 52%, families save ~$96/year on fuel. Job creation. 122	Gold Standard. Reduces indoor air pollution. 122	Successful (significant household savings and health co-benefits)

4.3. Key Market Actors: Project Developers, Buyers, and Intermediaries in the Region

The carbon market ecosystem in East Africa involves a diverse range of actors, from local community groups and national NGOs to international corporations and specialized carbon finance entities.

Project Developers:

These are the entities that design, implement, and manage carbon offset projects.

• In Kenya, prominent developers include established conservation organizations like Wildlife Works Carbon (involved in the Kasigau Corridor REDD+ project), the Chyulu Hills Conservation Trust, and the Northern Rangelands Trust (NKRCP).¹²⁸ The Kenya Forest Service (KFS) also engages in afforestation projects that can generate credits.¹²¹ Newer players and platforms like Pachama are also active.¹²¹ International NGOs such as Farm Africa (partnering with Acorn, Rabobank, AGRA) ¹¹⁸ and Solidaridad ¹¹⁹ are developing agroforestry carbon projects. Community-led initiatives like Mikoko Pamoja are also key developers in the blue carbon space.⁶¹
• In Tanzania, Carbon Tanzania has emerged as a significant developer of community-based REDD+ projects.³⁷ MJUMITA, a network of community forestry groups, is another key player in developing community-based REDD+ projects, often with a focus on securing land tenure.⁷³ Compassionate Carbon Tanzania Limited (a subsidiary of Eden: People+Planet) is developing the large-scale Rubeho Mountains Carbon Project (REDD+ and ARR).¹³³ Terra Global is involved in the HIMA REDD+ mangrove conservation program in Zanzibar.¹¹⁷ The Kaderes Peasants Development Plc develops agroforestry projects with coffee farmers.¹²⁰ Green Resources Ltd has also been active in reforestation projects.¹³⁶
• In Uganda, ECOTRUST is the primary implementing partner for the large-scale Trees for Global Benefits agroforestry programme.⁸⁸ Simoshi is a social enterprise focused on improved cookstove projects in schools.⁶ The Uganda Carbon Bureau has historically played a role in developing Programmes of Activities (PoAs), particularly for cookstoves across East Africa.⁹⁶ Other developers include Mandulis Energy and KOKO Networks (often in energy access) ¹³⁸, and Net Zero Climate Investments (safe water projects).¹³⁹ Green Resources has also had a significant, though controversial, presence with tree plantation projects.¹³

Buyers:

The demand for carbon credits from East African projects comes from a mix of international corporations seeking to meet voluntary climate commitments or, increasingly, to prepare for compliance obligations.

• For Kenyan projects, major corporate buyers include well-known international names such as Netflix, Apple, Shell, Air France-KLM, BHP, Delta Air Lines, and Kering (parent company of Gucci).¹²⁸ Other buyers include Nedbank (South Africa), Nespresso (Switzerland), and Zenlen Inc..¹²⁸ A significant transaction occurred in June 2023 when 16 Saudi Arabian firms, including Aramco, Saudi Electricity Company, and ENOWA (a NEOM subsidiary), purchased over 2.2 million carbon credits at an auction in Nairobi, with 70% of these credits originating from African projects, including Kenyan ones.¹⁴⁴
• In Tanzania, buyers for credits from Carbon Tanzania’s projects are reported to be companies in Europe, the US, and Tanzania itself.³⁸ Volkswagen ClimatePartners has been linked to the Longido and Monduli Rangelands soil carbon project, and The Nature Conservancy to the Resilient Tarangire Ecosystem Project, though these projects face significant community concerns.¹⁵
• For Ugandan projects, the government is advancing discussions for bilateral deals under Article 6.2 of the Paris Agreement with potential sovereign buyers like Switzerland, Singapore, and the UAE, reportedly eyeing a price of around $10 per credit.¹⁴⁵ Historically, the Swedish Energy Agency purchased credits from Green Resources, though this arrangement was later terminated due to unresolved land disputes.¹⁴¹ Companies in Sweden and other European countries are reported buyers of credits from the TGB programme.¹⁰¹ Globally, Shell and Microsoft are among the largest corporate buyers of carbon credits; Shell’s portfolio includes forestry, land use, and renewable energy (often avoidance credits), while Microsoft focuses more on carbon removal technologies like BECCS.⁹⁵ Their specific direct purchases from Tanzania and Uganda require more granular project-level data.

Intermediaries and Brokers:

Intermediaries, including brokers, consultants, and trading platforms, play a role in connecting project developers with buyers, and sometimes in project financing and development.

• Generally, there are concerns that some intermediaries in Africa purchase credits from local landowners or communities at very low rates and then sell them on the international market at significantly inflated prices, capturing a disproportionate share of the value.¹¹ Carbon credits typically reach buyers either through direct offtake agreements with project developers or via brokers and other intermediaries who purchase and resell the credits.¹⁴⁷
• In Kenya, while specific local brokerage firms are not extensively named in the provided materials, platforms like Pachama (a technology-based company selling credits from forest projects) are mentioned as offering credits from Kenyan projects.¹²¹ The Africa Carbon Markets Initiative (ACMI) report lists numerous stakeholders, including consultants and advisors, who may act as intermediaries.⁹ Globally recognized brokers like Numerco, SCB Group, and Emstream are active in the VCM ¹⁴⁸, and likely handle credits from various regions including Africa.
• In Tanzania, there are reports of the market being dominated by a handful of brokers, potentially disadvantaging other players.³² Carbon Tanzania acts as both a project developer and a direct seller of its credits.³⁷ Respira International, an international carbon finance company, partners with Carbon Tanzania for projects like Ntakata Mountains and Makame Savannah, likely acting as an intermediary or off-taker.¹³¹
• In Uganda, the Uganda Carbon Bureau was established with a “fair trade” ethos, partly to counter the exploitative practices of some brokers by providing direct support to project developers and managing PoAs.⁹⁶ Banks in Uganda are beginning to explore roles in financing carbon projects and potentially acting as intermediaries or aggregators for smaller enterprises in the future.¹⁴⁹ Mirova SunFunder, an investment firm, is working as an aggregator in partnership with a carbon broker for clean energy projects.¹⁵⁰ However, concerns about brokers taking large shares of revenue, leaving farmers with minimal earnings, persist in the broader Ugandan VCM.⁵⁶

The operational models and ethical stances of project developers vary significantly. Some, like Carbon Tanzania, ECOTRUST, and MJUMITA, are demonstrably mission-driven, prioritizing community partnerships and ensuring a high share of benefits flows to local stakeholders. Others may adopt a more purely commercial approach, where community benefits might be secondary to carbon credit generation. The choice of project developer, their transparency, and their long-term commitment to community well-being are thus critical factors influencing project outcomes and integrity.

Buyer behavior is also evolving. While some large corporations are showing increased sophistication in their procurement strategies, such as Microsoft’s focus on high-cost, high-integrity carbon removal projects ¹⁴⁶, others may continue to prioritize lower-cost credits, potentially paying less attention to the underlying quality or community impacts of the projects.¹⁴⁶ The increasing public and regulatory scrutiny on corporate climate claims and the risks of greenwashing are, however, pushing buyers towards more rigorous due diligence.

A notable gap appears to exist in the “missing middle” of local intermediation across all three countries. While some international brokers are active and certain local developers also fulfill intermediary functions, the presence of well-regulated, technically proficient, and ethically-grounded local intermediaries seems limited. This vacuum can be exploited by opportunistic or unscrupulous actors, often dubbed “carbon cowboys,” who may secure deals that are disadvantageous to communities or lack environmental integrity.¹¹ Strengthening this segment of the market with local expertise and robust oversight is crucial for fostering a healthier carbon ecosystem in East Africa.

Table 3: Major Carbon Credit Buyers and Intermediaries Active in East Africa (Illustrative Examples)

Country	Major Corporate Buyers (Examples)	Key Project Developers (Examples)	Known Intermediaries/Brokers (Examples/Types)
Kenya	Netflix, Apple, Shell, Air France-KLM, Delta, Kering, Aramco, Saudi Electricity Co. 128	Wildlife Works, NRT, KFS, Mikoko Pamoja CBO, Farm Africa, Solidaridad 118	Pachama (platform).121 International brokers. Local consultants/advisors.
Tanzania	Volkswagen ClimatePartners, The Nature Conservancy. Buyers from Europe, US, Tanzania for Carbon Tanzania credits. 15	Carbon Tanzania, MJUMITA, Compassionate Carbon, Terra Global, Kaderes 37	Respira International (partnering with Carbon Tanzania).131 Concerns about market dominance by few brokers.32
Uganda	Potential: Switzerland, Singapore, UAE (Art. 6.2).145 Historical: Swedish Energy Agency. Companies in Europe (for TGB credits).101	ECOTRUST, Simoshi, Uganda Carbon Bureau, Mandulis Energy, Net Zero Climate Investments 6	Uganda Carbon Bureau (developer & fair-trade intermediary).96 Mirova SunFunder (aggregator with broker).150 Concerns about exploitative brokers.56

Chapter 5: Technological Advancements and Verification Capacity

The credibility and integrity of carbon credits are fundamentally reliant on robust Monitoring, Reporting, and Verification (MRV) systems. Technological advancements offer new possibilities for enhancing MRV, but building sustainable domestic capacity to utilize these technologies and manage MRV processes remains a significant challenge for Kenya, Tanzania, and Uganda.

5.1. Current Use of Technologies (GIS, Drones, Satellite Monitoring) for Carbon Credit Verification

Geospatial technologies are increasingly central to the carbon credit lifecycle, particularly for projects in the Agriculture, Forestry, and Other Land Use (AFOLU) sector. Geographic Information Systems (GIS), coupled with remote sensing data from satellites (optical and radar, such as Landsat, Sentinel, ALOS PALSAR) and Light Detection and Ranging (LiDAR), are widely used for several critical MRV tasks ⁶⁶:

• Baseline Mapping: Establishing detailed initial maps of forest cover, land use, and vegetation types at the project’s outset. This spatial snapshot is essential for measuring future changes.⁶⁶
• Estimating Carbon Stocks: Combining GIS with satellite or LiDAR data allows project developers to estimate the amount of carbon stored in a forest’s biomass or in soils, helping to identify high-carbon density areas and track sequestration potential.⁶⁶
• Monitoring Land-Use Change: Continuous monitoring using time-series satellite imagery enables the detection of deforestation, forest degradation, or reforestation/regrowth. This is crucial for verifying that the carbon credits generated reflect real and measurable climate benefits.⁶⁶
• Risk Mapping: For REDD+ projects, geospatial data is used to create deforestation risk maps, which inform baseline scenarios by predicting where deforestation is most likely to occur in the absence of the project. Verra’s new VM0048 methodology, for instance, relies on jurisdictional-level risk maps developed using satellite data and geospatial analysis.¹¹¹

In Kenya, the Northern Kenya Rangelands Carbon Project (NKRCP) reportedly relies heavily on GIS and satellite imagery to track livestock movements and assess vegetation cover, which are then used as proxies to estimate carbon stored in soils.⁶⁶ However, this application has faced scrutiny, with investigations by Survival International alleging that many of the grazing maps lacked basic detail, failed to show livestock movements accurately, and could not definitively verify whether grazing occurred inside or outside project boundaries. Despite these alleged shortcomings, these spatial claims were reportedly used to justify significant carbon credit sales.⁶⁶ This case illustrates that while technology provides powerful tools, its application must be rigorous, transparent, and subject to independent verification, including ground-truthing, to avoid “illegitimate crediting and greenwashing”.⁶⁶ Technology used performatively, without robust underlying data and validation, can undermine the credibility of the entire system.

In Tanzania and across East Africa, technologies such as remote sensing and machine learning are increasingly recognized as critical for enhancing the quality and accuracy of forest carbon credit MRV.³³

In Uganda and the broader East African region, satellite data is also being harnessed for applications in precision agriculture, providing real-time insights into weather patterns, soil health, and crop conditions.¹⁵² Drones are employed for targeted interventions, such as precise spraying of inputs, and for rapid assessment following climate events. While primarily focused on agricultural productivity and resilience, these technologies have direct relevance for agroforestry and soil carbon projects, where changes in land management practices and biomass need to be monitored.¹⁵²

The increasing sophistication of these technologies offers the potential for more accurate, efficient, and transparent MRV. However, their effective deployment is not without challenges. The cost of acquiring high-resolution satellite imagery, LiDAR data, advanced analytical software, and drones can be substantial. Moreover, specialized technical expertise is required to process and interpret this data correctly. This can create an accessibility barrier for smaller, local project developers and communities in East Africa, potentially leading to a continued reliance on international consultants or the use of less accurate, lower-tier MRV methods if domestic capacity is not adequately developed.

5.2. Building Domestic MRV (Monitoring, Reporting, Verification) Capacity

All three East African countries recognize the critical need to build domestic MRV capacity, not only for participation in carbon markets but also for tracking progress towards their NDCs under the Paris Agreement and for broader climate action planning. Numerous internationally supported initiatives have aimed to bolster these capabilities.

In Kenya:

• Initiatives: The Low Emission Capacity Building (LECB) project, supported by UNDP, focused on enhancing national capacity for GHG inventory development and the preparation of Nationally Appropriate Mitigation Actions (NAMAs) with associated MRV systems. This initiative resulted in three NAMA proposals (Sustainable Solid Waste Management, Household Clean Energy, and Transport BRT system) that applied UNFCCC-approved MRV approaches.¹⁵³ The Initiative for Climate Action Transparency (ICAT) has been supporting Kenya in establishing a domestic MRV system for NDC tracking, with an initial focus on the energy and transport sectors.¹⁵⁴ Kenya had also proposed a national MRV+ system as part of a broader National Performance Benefit Measurement Framework, designed as an integrated system for tracking mitigation, adaptation, and their synergies.¹⁵⁴
• Hurdles: Despite these efforts, Kenya faces persistent challenges. These include limited awareness and technical understanding of climate change MRV requirements among stakeholders across various sectors; constrained institutional capacity; insufficient access to finance and technology specifically for MRV initiatives.⁶⁴ The country still lacks adequate tools to comprehensively measure, report, and verify progress on its climate commitments.¹⁵⁴ The full operationalization of a formal national MRV system remains incomplete, and issues such as data gaps, inconsistent data quality, and weak inter-agency coordination persist.¹⁵⁴

In Tanzania:

• Initiatives: The National Carbon Monitoring Centre (NCMC) is intended to coordinate national MRV processes and maintain a carbon registry.³³ The Vice President’s Office (VPO) and NCMC are involved in baseline data collection and reporting, although the CAG has noted discrepancies.⁴⁴ An initiative by Aether, working with the VPO, aimed to compile a national GHG inventory (for the period 1994-2025) and establish an online MRV Portal to serve as an archiving and coordination tool for building a sustainable national GHG inventory management system.¹⁵⁸
• Hurdles: Tanzania has historically relied on external consultants for GHG inventory compilation on a project-by-project basis, leading to challenges in retaining institutional memory and knowledge within national institutions.¹⁵⁸ REDD+ pilot projects have faced significant technical difficulties in establishing robust MRV systems, compounded by the low carbon stock densities in Tanzania’s miombo woodlands and the high costs of project implementation in remote areas, which have affected economic viability.¹²⁴ The CAG report highlighted inadequacies in how the VPO measured, reported, validated, and verified baseline data from carbon trade projects, and noted an over-reliance on international databases.⁴¹ Broader barriers include limited awareness of carbon trading and MRV, insufficient financial and technical capacity for project preparation and MRV, a lack of a comprehensive digitized registration system, and limited transparency in existing MRV systems.³

In Uganda:

• Initiatives: Uganda also participated in the LECB Project (2011-2015), which aimed to strengthen technical and institutional capacity for GHG inventory systems and NAMA MRV.¹⁵⁹ More recently, the Capacity Building Initiative for Transparency (CBIT) project (2018-2020), funded by the GEF and implemented by Conservation International, sought to establish institutional arrangements for a robust national GHG inventory and MRV system, build stakeholder capacity in data collection and processing, and pilot the system.¹⁵⁹ GIZ, through its ProCSA project, is working to improve the MRV system for the agriculture sector, particularly at the district level.¹⁶⁰ The World Bank has also piloted digital MRV approaches for rural electrification projects in Uganda.¹⁶¹
• Hurdles: Challenges persist in Uganda, including inadequate institutional coordination for climate change reporting; insufficient capacity to operationalize and effectively use existing MRV and GHG inventory systems; and discrepancies in data access, methodological tools, and data quality.¹⁵⁹ For the agriculture sector specifically, capacity limitations along the data supply chain from local to national levels, issues with data quality, and data formats not being tailored for climate reporting are significant obstacles.¹⁶⁰

Across all three countries, a common pattern emerges: while targeted international projects have provided valuable capacity-building inputs, systemic gaps remain. These interventions often appear to be too fragmented, short-term in nature, or not sufficiently embedded within national institutional structures and budgetary processes to ensure long-term sustainability. A more holistic, nationally owned, and continuously resourced strategy for MRV capacity development is evidently needed in each country.

A critical dimension of effective national MRV is the strength of data collection and management at the sub-national level (county, district, or community). This is especially true for land-use based carbon projects, where emission reductions and sequestration occur at very localized scales. Uganda’s GIZ-supported agricultural MRV project, with its focus on enhancing data collection processes at the district level ¹⁶⁰, exemplifies a positive approach. Strengthening this bottom-up flow of reliable data is crucial, yet it is an aspect often under-resourced in predominantly national-level capacity-building efforts.

The advent of digital MRV (dMRV) systems—utilizing tools like smart sensors, satellite data analytics, AI, and blockchain—is often presented as a transformative solution that can reduce costs, increase transparency, and improve the efficiency of MRV processes.¹⁶¹ However, the adoption of dMRV itself requires significant upfront investment in technology and infrastructure (e.g., reliable internet connectivity, data storage solutions) and specialized technical expertise, which may be limited in East Africa. There is a tangible risk of a “digital divide,” where only larger, better-resourced projects or countries can fully leverage these advanced tools, unless capacity-building efforts specifically target dMRV adoption and address these infrastructural and skills gaps. The observation that the UNFCCC’s Draft Standard for Article 6.4 methodologies (A6.4-MEP004-A03) lacks specific guidance on incorporating these emerging technologies into MRV systems is also a pertinent gap at the international level.¹⁶³

5.3. Comparative Analysis: Strategies for Strengthening Regional MRV Capabilities

Kenya, Tanzania, and Uganda share common needs in bolstering their domestic MRV systems. These include securing sustainable financing mechanisms for MRV activities beyond donor project cycles, improving inter-institutional coordination, standardizing data collection protocols and data management systems, enhancing technical expertise (particularly at sub-national levels where much of the primary data originates), and better integrating MRV outputs into national policy, planning, and budgeting processes.

Given these shared challenges and the limited resources available to each country individually, regional cooperation on MRV presents significant opportunities:

• Knowledge Sharing and Peer Learning: Existing platforms, such as the Eastern Africa Alliance on Carbon Markets and Climate Finance (EAA) ⁵⁹, can serve as vital conduits for sharing best practices, lessons learned from national MRV initiatives, and strategies for overcoming common obstacles.
• Regional MRV Hub or Center of Excellence: The establishment of a regional center could provide specialized training programs, support the development and adaptation of regionally appropriate MRV methodologies (especially for common ecosystem types or project categories like agroforestry or REDD+ in miombo woodlands), offer technical backstopping for data management and analysis, and potentially achieve economies of scale in accessing expensive technologies or expertise.
• Harmonization of Standards and Approaches: Developing common regional guidelines or minimum standards for MRV, particularly for similar project types prevalent across East Africa, could enhance the comparability of data, simplify processes for project developers operating in multiple countries, and increase the overall credibility of credits from the region.
• Joint Capacity Building Programs: Pooling resources to design and deliver comprehensive MRV training programs for experts from all three countries could be more cost-effective and foster a regional network of skilled practitioners.
• Leveraging Regional Data Infrastructure: Exploring the potential for shared satellite data procurement, regional data processing platforms, or common analytical tools could reduce costs and enhance access to advanced MRV technologies.

Such regional collaboration on MRV should be viewed not as a luxury but as a strategic necessity. It can prevent costly duplication of effort, create significant economies of scale in capacity building and technology adoption, and help build more robust, efficient, and credible MRV systems across East Africa.

Furthermore, as these countries increasingly look towards participation in international carbon market mechanisms under Article 6 of the Paris Agreement, their domestic MRV systems will need to meet stringent international requirements for transparency, accuracy, and accounting (including for corresponding adjustments).⁴ Regional cooperation can play a crucial role in ensuring that national MRV systems are designed and implemented with these international obligations in mind from the outset, facilitating smoother integration into global carbon markets.

Table 4: Key MRV Initiatives, Challenges, and Regional Collaboration Opportunities

Feature	Kenya	Tanzania	Uganda
Major National MRV Initiatives/Programs	LECB Project (NAMAs, GHG Inventory) 153; ICAT Project (Energy, Transport MRV) 154; Proposed MRV+ System 154	NCMC (Coordination, Registry) 33; Aether Project (GHG Inventory, MRV Portal) 158	LECB Project 159; CBIT Project (GHG Inventory, MRV System) 159; GIZ Ag-MRV Project 160; WB dMRV Pilot 161
Key MRV Capacity Challenges	Limited technical understanding & institutional capacity; data gaps; lack of formal national system; coordination issues 153	Reliance on external consultants; knowledge retention; technical MRV for REDD+; data quality & transparency; inadequate NCMC capacity 3	Institutional coordination; operationalizing existing systems; data access & quality; local government capacity for data 159
Existing/Potential Areas for Regional MRV Cooperation	EAA membership 59; Shared learning on registry development, Article 6 alignment, sector-specific MRV (e.g., geothermal, soil carbon).	EAA membership 59; Collaboration on REDD+ MRV for similar ecosystems (e.g., miombo), blue carbon methodologies, NCMC capacity building.	EAA membership 59; Sharing experiences from agroforestry MRV (TGB), dMRV pilots, district-level data systems.

Chapter 6: Addressing Equity and Countering Greenwashing

The long-term viability and ethical standing of carbon markets in East Africa depend critically on addressing issues of equity in benefit distribution and effectively countering the risks of greenwashing and exploitation.

6.1. Ensuring Fair Compensation for East African Communities in Global Carbon Markets

A fundamental challenge in global carbon markets, particularly for projects located in developing countries, is ensuring that local communities who are often the stewards of the carbon-sequestering resources receive fair compensation relative to the prices carbon credits command in international markets. Globally, Indigenous Peoples and Local Communities (IPLCs) manage vast territories that store immense amounts of carbon, yet they often receive a disproportionately small share of climate finance, estimated at less than 0.1%.¹¹

There is substantial evidence suggesting that intermediaries, including brokers and sometimes even project developers, can capture a significant portion of the carbon credit value. Reports indicate that brokers may purchase credits from landowners or communities at very low rates and then sell them on the international market for substantially higher prices, with the bulk of the profit accruing to these middlemen rather than flowing back to the communities on the ground.¹¹ This issue is compounded by the significant price disparity between the voluntary carbon market (VCM), where many East African projects sell their credits, and regulated compliance markets. In 2022, the average price of a VCM offset was reported to be as low as $2 per tonne, compared to prices like $85 per tonne in the EU Emissions Trading System.¹¹ While this low average VCM price reflects a mix of factors including the perceived quality of some projects and an oversupply of certain credit types, it underscores the financial vulnerability of communities relying on this market. However, it’s important to note that specific project types, such as high-quality blue carbon projects, can command much higher prices, in the range of $15 to $35 per credit.¹¹⁴

In Kenya, while the new regulations mandate specific benefit-sharing percentages (40% for land-based and 25% for non-land-based projects from “aggregate earnings”) ²², the actual monetary value reaching communities will depend on the final price of the credits, the transparency in calculating “aggregate earnings,” and the costs deducted before this calculation. The lack of a clear definition of “carbon rights” further complicates the notion of “fair compensation,” as communities may not be negotiating from a position of ownership.¹⁴ The case of the Northern Kenya Rangelands Carbon Project, where communities are seeking to renegotiate revenue sharing despite the project selling credits to major corporations ⁶⁵, highlights these challenges.

In Tanzania, the regulatory framework for benefit sharing is complex, with a significant portion of revenues potentially flowing to government-managed authorities before reaching communities.³ While some developers like Carbon Tanzania report a direct 61% share of their sales revenue to communities ³⁷, leading to tangible benefits like improved healthcare and education ³⁷, the broader picture is less clear. Concerns raised by Maasai communities regarding opaque contracts and inadequate benefits from large-scale soil carbon projects underscore the risks of inequitable outcomes.¹⁵ The CAG report also pointed to a lack of transparency in the pricing of carbon credits within the country.⁴⁴

In Uganda, the Trees for Global Benefits programme reports sharing 60% of carbon revenue with participating farmers.⁹⁰ However, there are also reports of intermediaries in the wider VCM exploiting farmers by paying very low prices per tonne of offset, far below indicative international averages for similar credit types.⁵⁶ The new 2025 Regulations, which require project-specific benefit-sharing plans ⁴⁶, aim to address this, but their effectiveness will depend on robust oversight and community empowerment in negotiations.

Ensuring fair compensation requires several interconnected strategies:

• Transparency in the Value Chain: Greater transparency is needed regarding the prices at which credits are sold by developers to intermediaries and then to final buyers, and the proportion of that final price that reaches the communities.
• Strengthening Community Negotiating Power: This involves clarifying carbon rights, providing communities with access to independent legal and technical advice, and supporting the development of strong local institutions (cooperatives, associations) that can negotiate collectively.
• Regulation of Intermediaries: Governments need to consider mechanisms for registering and overseeing the conduct of carbon market intermediaries to prevent predatory practices.
• Promoting Direct Access to Markets: Where feasible, supporting communities or local developers to access markets more directly, potentially through aggregated platforms or direct sales, could reduce the share captured by multiple intermediaries.
• Focus on High-Quality, High-Value Credits: Encouraging the development of projects that meet high integrity standards and deliver significant co-benefits can help command better prices, increasing the overall revenue pool available for sharing.

6.2. Safeguards Against Exploitation and Greenwashing: Current Measures and Their Effectiveness

The credibility of carbon markets hinges on robust safeguards that prevent the exploitation of communities and ensure that carbon credits represent genuine, verifiable emission reductions, thereby countering greenwashing.

Greenwashing occurs when companies make misleading or unsubstantiated claims about the environmental benefits of their actions or products, including the use of carbon credits to “offset” emissions without genuinely reducing their own carbon footprint or by using credits of dubious quality.¹³ Forest carbon market initiatives, including REDD+, have faced longstanding criticism for potentially contributing to greenwashing by overstating emission reductions or by enabling polluters to avoid making deeper cuts in their own operations.⁹³

Safeguards in East Africa:

• Kenya:
  • The Climate Change Act, 2016, emphasizes transparent accounting and monitoring to prevent greenwashing.¹⁷ The Climate Change (Carbon Markets) Regulations, 2024, mandate a National Carbon Registry to track credits and prevent double counting, require independent third-party validation and verification of projects and results against international standards, and stipulate EIAs by NEMA.¹⁷ These regulations codify core carbon principles like additionality and permanence.¹⁶⁷
  • The recently launched Kenya Green Finance Taxonomy (KGFT) is a voluntary tool designed to classify environmentally sustainable investments, aiming to improve transparency, mitigate greenwashing, and guide capital allocation. It includes minimum social safeguards related to labor laws and human rights.¹⁶⁴
  • Effectiveness & Documented Cases: Despite these frameworks, concerns persist. The NKRCP has faced allegations related to flawed GIS mapping used to justify credits.⁶⁶ The rapid enactment of laws with limited public participation ¹⁴ and the lack of clear carbon rights definition ¹⁴ can create vulnerabilities. While the new regulations aim to bring order, their effectiveness in preventing sophisticated forms of greenwashing or ensuring full community protection is yet to be proven. General literature suggests that even with safeguards, FCMIs have been linked to rights violations and overstated emission reductions globally.⁹³ No specific regulatory response outcomes to documented greenwashing cases in Kenyan carbon projects were detailed in the provided snippets beyond the ongoing legal challenges to the NKRCP.⁶⁵
• Tanzania:
  • The Environmental Management (Control and Management of Carbon Trading) Regulations, 2022/2023, require projects to align with national policies, undergo environmental and social impact assessments (including REDD+ safeguards), involve local communities, and ensure transparency.³ Verification and certification are to be in accordance with recognized international standards.²⁷ The 2024 Environmental Management (Amendment) Act aims to develop a transparent carbon trading framework.³⁰
  • Effectiveness & Documented Cases: The CAG report highlighted significant governance weaknesses, including lack of transparency in carbon credit pricing and project monitoring, and inadequate alignment with international agreements, which inherently increase risks of poor-quality projects and potential greenwashing.⁴⁰ The extensive issues raised regarding Maasai carbon projects (lack of FPIC, opaque contracts, land rights concerns) point to severe failures in safeguarding community rights, even if not explicitly labeled “greenwashing” in all reports.¹⁵ The government has acknowledged these challenges and called for greater transparency and awareness.¹⁶ The effectiveness of current safeguards is clearly compromised by these systemic issues.
• Uganda:
  • The National Climate Change (Climate Change Mechanisms) Regulations, 2025, establish clear roles for national authorities and technical committees, mandate a two-stage project approval process with feasibility studies and benefit-sharing plans, require verification by accredited third-party verifiers (Gold Standard, VCS), a national registry to prevent double counting, and transparent credit transfer procedures.⁴⁶ Projects must demonstrate environmental integrity and equitable benefit sharing.⁴⁶
  • Effectiveness & Documented Cases: The regulations are very new, so their practical effectiveness is yet to be seen. However, they appear to incorporate many best-practice safeguards. Past issues in Uganda include the Green Resources plantation project, which faced allegations of forced evictions and negative impacts on food security, leading to the Swedish Energy Agency terminating its carbon credit agreement.¹³ The GFC’s critique of the TGB project also raises questions about greenwashing and community impacts, though these are contested.⁹⁰ The EACOP project has also faced accusations of greenwashing its biodiversity offset plans.¹⁶⁸ These cases highlight the historical vulnerability of projects in Uganda to such issues, underscoring the importance of rigorous enforcement of the new regulations.

General Safeguard Measures and Their Effectiveness:

Across the region, reliance on international standards like Verra and Gold Standard is a key strategy for ensuring project quality and preventing greenwashing.17 These standards have their own methodologies for additionality, permanence, leakage, and social safeguards. However, the effectiveness of these standards themselves has been questioned, with studies indicating potential over-crediting in some REDD+ and cookstove methodologies.9 Verra is in the process of updating its REDD+ methodologies (e.g., VM0048) to address these concerns.103

Building integrity in African carbon markets requires a multi-pronged approach ¹⁷⁰:

• Transparency and Shared Codes of Conduct: Among governments, project developers, intermediaries, and buyers.
• Robust National Regulatory Frameworks: Clearly defining rights, responsibilities, approval processes, and MRV requirements.
• Independent Verification: Adherence to high-quality international standards and verification by accredited third parties.
• Effective MRV Systems: Including digital MRV where appropriate, to ensure accurate accounting and tracking of emission reductions and credits.
• Strong Community Engagement and FPIC: Ensuring communities are fully informed and consent to projects, and that benefit-sharing is equitable.
• Grievance Redress Mechanisms: Accessible and effective mechanisms for communities and other stakeholders to raise concerns and seek redress.

While East African countries are making legislative progress, the documented cases of community rights violations, project failures, and criticisms of project integrity (e.g., NKRCP in Kenya, Maasai projects in Tanzania, Green Resources in Uganda) indicate that the effectiveness of existing and emerging safeguards is still a major work in progress. The transition from policy on paper to effective protection and equitable outcomes on the ground requires sustained political will, institutional capacity building, vigilant civil society oversight, and responsible corporate behavior from both project developers and credit buyers.

6.3. Comparative Analysis: Best Practices and Failures in Ensuring Equity and Market Integrity

A comparative look across Kenya, Tanzania, and Uganda reveals emerging patterns of practices that contribute to or detract from equity and market integrity in the carbon sector.

Best Practices (leading to more equitable outcomes and higher integrity):

1. Genuine Community Ownership and Co-design: Projects where communities have strong ownership stakes and are involved from the initial design phase tend to yield more equitable benefits and foster local stewardship. Examples include Mikoko Pamoja (Kenya) ⁶¹ and projects by Carbon Tanzania and MJUMITA (Tanzania) ³⁷ that often build on existing community forestry structures.
2. Secure Land and Carbon Rights for Communities: Where communities have legally recognized rights to their land and, ideally, to the carbon benefits generated, they are in a stronger position to negotiate fair terms and ensure long-term engagement. The work of MJUMITA in securing VLFRs is an example.⁷³ The lack of this is a major issue in Kenya.¹⁴
3. Transparent and High Percentage Benefit Sharing Directly to Communities: Clear, understandable mechanisms that channel a significant portion (e.g., 60% or more) of the carbon revenue directly to communities or community-managed funds, with transparency in how these funds are used for locally prioritized development (health, education, livelihoods), build trust and deliver impact. Carbon Tanzania ³⁷ and ECOTRUST’s TGB ⁹⁰ aim for this.
4. Focus on Tangible Co-benefits: Projects that deliver significant non-carbon benefits (improved food security from agroforestry, better health from clean cookstoves, enhanced fisheries from mangrove restoration) are more resilient and valued by communities, irrespective of carbon price volatility.⁶
5. Robust Third-Party Verification to High-Integrity Standards: Adherence to credible international standards (Gold Standard, Plan Vivo, newer Verra methodologies) and rigorous independent verification enhances project integrity and market confidence.⁶
6. Capacity Building and Long-Term Partnerships: Developers investing in building local institutional capacity, technical skills, and financial literacy, and committing to long-term engagement rather than short-term credit extraction, foster sustainability.⁶⁸
7. Accessible Grievance Redress Mechanisms: Providing clear and culturally appropriate channels for communities to raise concerns and seek resolution is crucial for addressing issues before they escalate.

Failures and Problematic Practices (leading to inequity and low integrity):

1. Lack of Free, Prior, and Informed Consent (FPIC): Projects initiated without genuine community consultation, understanding, and consent, often involving opaque contracts or pressure on communities. This is a major concern in some large-scale land projects in Tanzania (Maasai areas) ¹⁵ and has been alleged in critiques of projects elsewhere.
2. Disregard for Customary Land Rights and Displacement: Carbon projects that lead to the restriction of access to traditional lands and resources, or outright displacement of communities, without adequate compensation or alternatives, are highly inequitable. The Green Resources case in Uganda is a stark example.¹³
3. Opaque and Inequitable Benefit Sharing: Complex or non-transparent revenue sharing, where communities receive a minimal fraction of the credit value or where benefits are captured by elites. The role of exploitative intermediaries is a significant factor here.¹¹
4. Weak Project Design and Overstated Carbon Claims (Greenwashing): Projects with flawed baselines, poor additionality arguments, inadequate leakage assessment, or insufficient permanence measures, leading to the issuance of low-quality credits that do not represent real emission reductions. Criticisms of some REDD+ and soil carbon projects fall into this category.⁹
5. Insufficient Monitoring and Enforcement by Regulatory Bodies: Weak government oversight allows poor quality projects or exploitative practices to persist, as highlighted by Tanzania’s CAG report.⁴⁰
6. Focus on Carbon Revenue at the Expense of Livelihoods: Projects that prioritize carbon sequestration in ways that undermine local food security or traditional livelihoods without providing viable and superior alternatives (e.g., converting prime agricultural land for tree planting solely for carbon).¹⁰¹

The experiences in East Africa suggest that achieving equity and integrity is not merely a technical challenge but a profound governance issue. The “developer model” itself is a critical variable: ethical, mission-driven developers who see communities as genuine partners are more likely to foster positive outcomes than those focused primarily on maximizing credit extraction. Similarly, informed and vigilant buyers who conduct thorough due diligence on project quality and social impacts play a crucial role in driving up standards. The new national regulations in all three countries are a step towards creating frameworks for better practice, but their true test will be in rigorous enforcement and their ability to empower communities and ensure accountability from all market actors.

Chapter 7: Conclusions and Recommendations

The exploration of carbon market engagement in Kenya, Tanzania, and Uganda reveals a region at a pivotal juncture. Rich in natural capital and with a growing policy focus on climate action, East Africa possesses significant potential to leverage carbon finance for sustainable development. However, realizing this potential equitably and with environmental integrity requires navigating a complex landscape of evolving regulations, diverse community experiences, varied business models, technological learning curves, and persistent governance challenges.

7.1. Summary of Key Findings

• Regulatory Development: All three countries have made notable strides in establishing legal and institutional frameworks for carbon markets. Kenya’s comprehensive Climate Change Act and Carbon Markets Regulations (2024) provide a detailed structure, though concerns about inclusivity in their rapid enactment and the absence of clearly defined “carbon rights” persist. Tanzania’s 2022/2023 regulations and 2024 amended Environmental Management Act aim to streamline its market, but face severe implementation challenges highlighted by the CAG, including stalled projects and governance deficits. Uganda’s newly minted 2025 Climate Change Mechanisms Regulations appear robust and aligned with international standards, but their success hinges on effective operationalization and enforcement. A common gap is the lack of regional harmonization, leading to a potentially fragmented East African carbon market.
• Community Participation and Benefit Sharing: Community engagement varies widely. Successful projects, often characterized by strong local partnerships, direct benefit flows (e.g., 60-61% of sales revenue in some Tanzanian and Ugandan projects), and tangible co-benefits (improved livelihoods, social services), demonstrate the potential for positive impact. Examples include Mikoko Pamoja in Kenya, projects by Carbon Tanzania and MJUMITA in Tanzania, and the Trees for Global Benefits programme in Uganda. However, significant challenges remain, particularly concerning Free, Prior, and Informed Consent (FPIC), security of land tenure, equitable distribution of benefits within communities, and the risk of elite capture. Large-scale projects, especially on communal lands, have sometimes led to conflict and accusations of rights violations. The legislated benefit-sharing percentages in Kenya (40% for land-based projects) and the complex regulatory model in Tanzania require careful monitoring to ensure genuine community empowerment.
• Business Models and Market Dynamics: Land-based models such as REDD+, agroforestry, and blue carbon are prevalent, with soil carbon also emerging. The success of these models in delivering both community income and environmental integrity is closely tied to secure land tenure, strong community involvement, and the generation of tangible local co-benefits beyond carbon revenue. International buyers, including major corporations, are active, but the role of intermediaries is often opaque and can lead to value leakage away from communities. There is a growing market preference for high-integrity credits with verifiable co-benefits.
• Technology and MRV Capacity: Geospatial technologies (GIS, remote sensing) are increasingly used for MRV, but their application requires rigor and ground-truthing to avoid inaccuracies or misuse. All three countries face systemic domestic MRV capacity gaps in terms of technical expertise, institutional coordination, and sustainable financing, despite various internationally supported capacity-building initiatives. Building robust, nationally-owned MRV systems, potentially enhanced by digital technologies, is crucial for market credibility and NDC tracking.
• Equity and Greenwashing: Ensuring fair compensation for communities relative to global carbon credit prices is a major challenge, with intermediaries often capturing a large share of the value. Safeguards against exploitation and greenwashing are being incorporated into national regulations and through adherence to international standards (Verra, Gold Standard, Plan Vivo). However, documented cases of rights infringements and projects with questionable environmental integrity highlight the ongoing risks and the need for stringent enforcement and continuous improvement of safeguard policies and practices.

7.2. Recommendations for Inclusive and Sustainable Carbon Business Models

Based on the comparative analysis, the following recommendations are proposed to help Kenya, Tanzania, and Uganda, as well as regional stakeholders, unlock the carbon economy in a more inclusive, equitable, and sustainable manner:

A. Strengthening Policy and Regulatory Frameworks:

1. Clarify and Secure Carbon Rights for Communities:
   • Kenya: Urgently amend legislation to explicitly define carbon rights, ensuring that communities on whose land carbon is sequestered or emissions are reduced have clear, legally recognized ownership or usage rights to the resulting carbon credits. This is fundamental for empowering communities in negotiations and ensuring they are primary beneficiaries, not just recipients of a percentage of earnings.
   • Tanzania & Uganda: Conduct thorough legal reviews to ascertain the status of carbon rights under current land and environmental laws and, if necessary, introduce clear provisions to secure community carbon tenure, particularly for projects on customary or communal lands.
2. Enhance Public Participation and Transparency in Regulatory Processes:
   • All three countries should institutionalize robust, inclusive, and adequately timed public consultation processes for all future climate change and carbon market legislation and major policy decisions. This includes proactive outreach to rural and indigenous communities in accessible formats and languages.
3. Standardize and Simplify Project Approval and Benefit Sharing:
   • Regionally: The East African Community (EAC) and the Eastern Africa Alliance on Carbon Markets and Climate Finance (EAA) should spearhead efforts to develop harmonized regional guidelines or minimum standards for project approval, MRV, and benefit-sharing principles. This would reduce complexity for developers, enhance market transparency, and prevent a “race to the bottom.”
   • Nationally:
     • Kenya: Review the Community Development Agreement (CDA) model to ensure it genuinely empowers communities and aligns with community land rights, rather than potentially subordinating them. Ensure transparency in the calculation of “aggregate earnings.”
     • Tanzania: Provide official clarification on the benefit-sharing mechanism under the 2022/2023 Regulations, particularly the role of the “Managing Authority” versus direct community shares, and the calculation basis (gross revenue vs. net). Streamline the bureaucratic project registration and approval process identified by the CAG.
     • Uganda: While the 2025 Regulations provide a good framework for benefit-sharing plans, develop clear national guidelines on what constitutes “fair and equitable” benefit sharing to support communities in negotiations and ensure consistency.
4. Regulate Carbon Market Intermediaries:
   • All three countries should establish registration and oversight mechanisms for carbon market intermediaries (brokers, consultants, advisors) operating within their jurisdictions. This should include codes of conduct, transparency requirements regarding fees and credit pricing, and penalties for exploitative practices.

B. Enhancing Community Participation and Empowerment:

5. Strengthen Local Community Institutions:
   • Invest in capacity building for local cooperatives, CBOs, VFAs, and other community governance structures to enhance their ability to effectively participate in project design, negotiate fair agreements, manage carbon revenues transparently, and implement community development initiatives. This includes training in financial literacy, project management, legal rights, and conflict resolution.
6. Ensure Meaningful Free, Prior, and Informed Consent (FPIC):
   • Move beyond procedural FPIC to ensure genuine, culturally appropriate, and ongoing consultation and consent processes. This requires providing comprehensive project information (including potential risks and long-term implications) in local languages, allowing adequate time for community deliberation, and respecting community decisions, including the right to refuse a project.
7. Develop Accessible Grievance Redress Mechanisms:
   • Establish and promote independent, accessible, and effective grievance redress mechanisms at both national and project levels, enabling communities and other stakeholders to report concerns and seek resolution for any negative impacts or contractual breaches.

C. Improving Business Models and Market Integrity:

8. Prioritize Projects with Strong Co-benefits:
   • Governments and development partners should incentivize and prioritize carbon projects that deliver significant, verifiable local co-benefits (e.g., improved food security, enhanced biodiversity, access to clean energy, health improvements, alternative livelihoods) alongside emission reductions.
9. Promote Transparency Throughout the Value Chain:
   • Encourage or mandate disclosure of carbon credit pricing at different stages of the transaction (developer to intermediary, intermediary to final buyer) to improve market transparency and help ensure fairer value distribution.
10. Support Direct Market Access for Communities/Local Developers:
    • Explore and support initiatives that enable community groups or local project developers to aggregate credits and access carbon markets more directly, potentially reducing reliance on multiple layers of intermediaries.

D. Building Domestic Technological and MRV Capacity:

11. Invest in Sustainable National MRV Systems:
    • Develop and fund long-term national strategies for MRV capacity building that go beyond short-term donor projects. This includes strengthening institutional coordination, investing in technical training (especially at sub-national levels), establishing robust data management infrastructure, and integrating MRV into national budgetary processes.
12. Foster Regional MRV Cooperation:
    • Support the establishment of a regional MRV hub or center of excellence for East Africa to facilitate knowledge sharing, develop regionally adapted methodologies, provide specialized training, and potentially offer shared access to advanced MRV technologies (e.g., satellite data processing).
13. Promote Ground-Truthing and Community-Based Monitoring:
    • Ensure that technology-based MRV (remote sensing, GIS) is complemented by rigorous ground-truthing and, where appropriate, involve communities in participatory monitoring of carbon stocks and project impacts. This enhances accuracy and local ownership.

E. Ensuring Equity and Countering Greenwashing:

14. Strengthen Enforcement of Safeguards:
    • Rigorously enforce existing national and international environmental and social safeguards. This requires adequately resourced and independent regulatory bodies (NEMA Kenya, NEMC/VPO-DoE Tanzania, MWE/NEMA Uganda) with the mandate and capacity to monitor compliance and impose penalties for violations.
15. Enhance Due Diligence by Credit Buyers:
    • Encourage international credit buyers to conduct thorough due diligence not only on the carbon accounting aspects of projects but also on their social impacts, community engagement processes, land tenure implications, and benefit-sharing arrangements. Initiatives promoting buyer integrity (like VCMI) should be supported.
16. Support Independent Monitoring and Civil Society Oversight:
    • Recognize and support the role of independent researchers, civil society organizations, and the media in monitoring carbon projects, exposing malpractices, and advocating for community rights and market integrity.

By adopting these recommendations, Kenya, Tanzania, and Uganda can move towards unlocking the full potential of their carbon economies in a manner that genuinely contributes to climate change mitigation, fosters sustainable local development, empowers communities, and upholds the highest standards of environmental and social integrity. The journey requires a concerted effort from governments, the private sector, civil society, and international partners, grounded in principles of transparency, equity, and long-term vision.

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