- 4 min read
TL;DR
Climate change is real and needs to be fixed
The VCM is corrupt, ineffective and losing credibility
Africa did not ask for an energy transition but is being forced to do it anyway
Climate funding is being wasted on things that don't work
Africa needs scalable solutions today, not expensive saviours tomorrow
Despite recent policy turnarounds and a renewed narrative challenging climate science, the empirical evidence remains unequivocal. Anthropogenic climate change is not only real but accelerating at an alarming rate, with fossil-fuel energy consumption serving as the primary driver. This makes virtually all of us complicit in the problem. By logical extension, climate change represents a shared challenge that requires collective action and responsibility.
While addressing climate change through clean energy transition is undoubtedly a noble endeavour, a critical cost-benefit analysis reveals glaring inconsistencies in how the world allocates resources and financial responsibility for this expensive transformation. Carbon markets, initially positioned as an elegant trading-based solution, have increasingly demonstrated fundamental flaws that undermine their credibility. These markets create perverse incentives that fail to deliver genuine environmental benefits while enabling continued pollution through financial mechanisms rather than actual emissions reductions.
It's a shell game. And will quickly become a Ponzi scheme if left unchecked.
Africa provides a compelling case study of these market inequities. The continent remains largely pre-industrial and contributes less than 4% of global greenhouse gas (GHG) emissions. Yet paradoxically, 11% of all carbon credits created since 2016 originated from projects in Africa, while only 2% of the voluntary carbon market (VCM) value generated was reinvested into African economies. This striking disparity highlights a troubling dynamic in global climate finance. The carbon market system, supposedly designed for environmental protection and development, operates through trade and finance engineering highly vulnerable to exploitation by more powerful economic players.
This emerging form of green-colonialism demands critical scrutiny rather than blind faith as the ideal synthesis of globalisation and environmental stewardship it purports to be.
At the heart of the problem-space in our view, is a predatory self-serving obsession with nature based solutions (NBS). This mechanism, while effective at maintaining baseline CO2 emissions, struggles to create nett-new CO2 sequestration at effective scale - time lag, vulnerability to climate change itself, site specificity and measurement uncertainty create a confluence of unintended consequences - further exacerbated by humans' inability to comprehend large numbers - and this is what really drives the con job.
Here's a thought experiment - when was the last time you visualised how many trees grow in a hectare and how many CO2 molecules they absorb from the atmosphere? Now multiply that by millions of hectares. Do you even know how big a hectare really is? Or how much CO2 is in a metric tonne for that matter?
Why is this a problem? NBS carbon credits are cheap. And require little to no effort to spirit into existence. A digital geo-fence and a paid certificate is pretty much all that's needed. There you go - hundreds of millions of dollars magically appear.
Impact VC's get exits, carbon traders get commissions and the communities whose land the money is made from are contractually frozen out of the value chain for a century.
Thanked for their role in preventing climate change with a few water drums, school desks and a solar panel or two. And large polluters get to carry on business as usual without taking any real action for their waste.
We ignorantly read their PR spin headlines and think the problem is being dealt with. This keeps happening. I challenge you to deny it.
But the game is fast becoming clear. One only needs to look at the number of high-profile carbon accounting scandals, tech platform and climate fund bankruptcies to see the direct effects of a flailing, corrupt market. On it's last legs and destined to become a cautionary tale in our climate solution omnibus.
While developed nations allocate development funding pursuing green hydrogen, direct air capture, enhanced rock weathering, fusion reactors and an absurd number of AI-enabled energy optimisation platforms - many of which will never progress beyond proof-of-concept and consume billions in capital investments with uncertain returns, Africa still remains largely excluded from these advancements, positioned as passive recipients of future "clean technology" and "green technology" innovations. The continent neither possesses the financial resources to gamble nor should it be subject to experimental, unproven, vanity project moonshots.
Concurrent challenges that some rightfully argue are more urgent for Africa's development than adherence to global environmental agendas include education, healthcare, socioeconomic disparities and unemployment. These represent critical areas requiring intervention with limited solutions implemented with any measurable success - but the one thing we can agree on is that Africa needs industrialisation to grow faster. And it needs stable, cheap, abundant energy to do that.
Such imperatives contrast starkly with an expensive energy transition we did not ask for, did not contribute towards its need to exist and certainly will not benefit from until the right-sized investments are made. And the systematic exploitation stops.
A more pragmatic, evidence-based approach to Africa's environmental challenges is required. Designed from the ground up to be relevant, appropriate and achievable in our time.
At SystemIQ, we embrace these challenges while developing alternative fuel solutions that address climate concerns through direct action rather than problematic offset mechanisms. Our approach focuses on creating measurable, verifiable emissions reductions at the source through carbon-neutral products & environmental benefits where they're most needed while generating authentic economic value for local communities.
