By Jeff Kapembwa

Zambia inched closer to plugging the recurring climatic change effects on its landscape and the people after President Hakainde Hichilema assented to the Bill into law last year.

The Green Economy and Climate Change Act, 2024, assented to on 18 December last year, presents risks and opportunities for people and businesses alike in Zambia. It gives an understanding and mitigates the risks involved as the crisis recurs.

The new law, making Zambia one of Africa’s determined countries to plug the climate crisis which last year swept all gains in economic, environment, and human capital, is described as one of the rare occasions at which the country will strive to leverage the opportunities to grow its economy.

The business entity is inevitably expected to contribute to the country’s sustainable development goals as enshrined it in National Determined Contributions (NDCs) and allow all players to enhance their own resilience and competitiveness.

Accounting and consulting firm, PricewaterhouseCoopers (PwC), a globally rated institution, offering services in audit, tax, and strategy management and rated among the world’s “Big Four describes the Act as a landmark legislation as it will promote sustainable development and address climate change in Zambia, one of the Least Developed Countries, but vulnerable to climate crisis.

It outline advantages and shortcomings that need redress for the Act to successfully ensure climate action was tenable and cites the need for technical support to businesses that will need to access technical support and guidance from the department to help implement green initiatives effectively.

It recommends businesses to generate their own data in their transformation journey with partnerships being encouraged. This, PwC sees it an opportunity to embrace their own data transformation journey.

For effective execution and maximization  from the act, there is need for business partnerships with the department on pilot projects and innovations in green technologies as these are deemed ideal for the creation of new business opportunities and advancements.

It calls for the establishment of the Green Economy and Climate Change Council and Technical Committee to oversee its implementations for maximum returns for players that seek the law in various endeavours.

The Green Economy and Climate Change Act, 2024, PwC argues needs to be understood in both risks and opportunities for people and businesses to ease mitigation on potential risks while leveraging the opportunities.

Businesses can contribute to the country’s sustainable development goals and enhance their own resilience and competitiveness if the Act is well harnessed.

There are risks to the success of the Act in the absence of transparency in handling climate change-related funds as it is at risk of misallocation, regulatory capture, and undue influence from private interests.

“If Zambia is to truly embrace a green and sustainable future, integrity must be at the center of our climate policies and initiatives.” The analysis reads in part, cautioning that:

“Strengthen oversight of climate finance to prevent undue influence and mismanagement of funds meant for environmental sustainability. Zambia’s response to the climate crisis must be guided by integrity and accountability at all levels.”

On adaptation and mitigations, PwC calls on interest groups to develop National Adaptation and Mitigation Plans to be reviewed every five years. A key provision in this section of the Act is the development of a sector emission reduction plan.

It warns of risks relating to compliance costs and calls for developing and implementing sector-specific emission reduction plans which may incur significant costs for businesses. There is a greater need for regular updates and reviews by businesses on best practices to meet adaptation and mitigation targets, which can be resource-intensive.

There is, however, greater opportunities in the  Act with a call for sustainability leadership that will devise robust adaptation and mitigation strategies. Businesses can position themselves as leaders in sustainability, enhancing their reputation and market position.

With funding support, PwC sees a potential for businesses to receive funding and support for projects that align with national adaptation and mitigation plans, reducing financial burdens. Greenhouse Gas (GHG) Emissions Management be introduced.

The Greenhouse Gas Inventory Management System and emission standards be set up where the various sectors, forestry, energy, agriculture, livestock, industrial processes and product use, waste, and any other sector determined by the Minister of Green Economy and Environment should collaborate and provide data and information to the Department for the Greenhouse Gas Inventory Management System.

This component of the Act requires, too that, anyone who emits greenhouse gases to keep and maintain an inventory of greenhouse gas-related information in a prescribed manner.

There is also need as part of the regulatory role ensure businesses, particularly those in the named sectors invest in systems to monitor, report, and verify greenhouse gas emissions, which can be costly.

There be strict adherence by various players in the sector with those flouting the rules being penalised for Non-compliance with the Act’s provisions.

Reliability of GHG data and the ability to report timeously and consistently should be a priority and should be tried and tested and then continuously adaptable to the ever-changing regulatory landscape and international standards around sustainability reporting.

“Additionally, the requirement to report GHG data in this manner may impose a financial burden on all stakeholders to implement systems capable of capturing the necessary information.

PwC, in its analysis, encourages a digital transformation, whose transitional period should be set. The reporting requirement around this new Act must be, as much as possible, digital and factor in the user experience into its design and implementation.

The Act, if well executed has various opportunities but transparency remains paramount.  Compliance with the Greenhouse Gas Inventory Management System can enhance transparency and credibility, attracting environmentally conscious investors and stakeholders.

Private sector participation and agile implementation is encouraged to attain reality in fighting climate change and attain a Green and Clean economy in Zambia as espoused by Zambia.

“The private sector has the opportunity to participate in the design and implementation of a user-centered GHG inventory management system.”

The report requires too, Carbon Stock Management and Carbon Markets, being paramount. Key provisions encourage regulations for carbon credit generation and trading.

The ownership of carbon is vested in the President, on behalf of the Republic, until transferred or assigned under this Act or any other written law and a person shall not trade in carbon without a certificate of authorization.

Businesses will need to obtain authorisation and in the design and implementation of a user-centered GHG inventory management system.

Carbon Stock Management and Carbon Markets calls for among other regulations for carbon credit generation and trading. The ownership of carbon is vested in the President, on behalf of the Republic.

It remains in force until transferred or assigned under this Act or any other written law. No person shall be allowed to trade in carbon without a certificate of authorisation issued under this Act.

Businesses will obtain authorisation and registration to participate in carbon credit generation and trading, which can be a complex process.

On Carbon incentives for local enterprises, PwC notes that apart from aiming to benefit the communities where carbon sequestration occurs, the Act, however falls short in providing sufficient incentives for local private sector participation.

There is room for businesses to benefit from the Act through generation of revenue through carbon credit trading and participation in carbon markets, creating new income streams.

There are also offset projects and by investing in carbon offset projects it will help businesses meet emission reduction targets and generate additional income, while also contributing to environmental sustainability.

The Act provides for the establishment of the Green Economy and Climate Change Fund to finance climate change actions and support research. It will consist of monies that may come from parliamentary appropriations, grants, and donations, approved through ministries.

Other revenue streams will be levies from carbon credit transactions, funds vested in or accruing to the Fund, and payments under any other written law.

The Fund may be used for financing climate change projects, maintaining the Integrated Measuring Reporting and Verification System, capacity development, research and data collection, providing grants and loans for climate change research and innovation, and other matters related to promoting the Green Economy and Climate Change.

There is a clarion call or accountability of the funding to be set for Climate action.  All funded projects will have accountability and reporting requirements, which can add to administrative burdens.

There will be access to finance for green projects, research, and capacity development can help businesses implement sustainable practices without bearing the full financial burden.

The Act will provide for the establishment of the Fund for Innovation. This is to encourage businesses to innovate and develop new technologies and practices.  Businesses will be eligible to generate revenue through carbon credit trading and participation in carbon markets, creating new income streams.

Investing in carbon offset projects can help businesses meet emission reduction targets and generate additional income, while also contributing to environmental sustainability.

Overview: Courtesy: (UNEP)

•  Zambia contributes to global climate change though at a very low rate. GHGs emissions in Zambia have increased by 6.2 % from 54.52 million tons of CO2 equivalent (CO2e) in recent years
•  to 58.64 million tons of CO2 equivalent (CO2e) in 2010.
• The largest contributor to GHGs in 2010 came from land use change and forestry, which accounted for 53.7% followed by agriculture at 33.3%. energy and industrial processes such as combustion for fossil fuels accounted for 12 % and other sectors accounted for 1%.
• The total GHGs emissions from all sectors are projected to increase from 58.64 million tons from all sectors to 216.8 million tones CO2 equivalent by the year 2030 if the country does not put in place measures to reduce GHGs emissions.
• (IPCC, 2013) says that the two biggest emitters’ of GHGs in the world today accounting for over 30 % of emission’s are China and the USA.  The entire African continent only accounted for ≤ 2%.  However, the impacts of climate change are most felt by least developed nations such as Zambia.