Finance expert Paulo Carvalho said last week that Mozambique needs all kinds of climate finance due to its climate vulnerabilities, stressing that “there is also a need to create an entity that can regulate the functioning of the Carbon Credits market”.
Paulo Carvalho, who has a doctorate in finance and is a professor at the University Institute of Lisbon, Portugal, was speaking during training organised by the Higher Institute of Transport and Communications (ISUTC) in Maputo on Emerging Climate Finance Models.
“Climate finance is very important for a country like Mozambique, which is exposed to certain climate vulnerabilities, but at the same time has the potential to introduce some energy solutions. Within the resources that the country has, we can look at solar, hydro and wind solutions, in other words, the generation of alternative energies, compared to energy that consumes more carbon resources,” explained Paulo Carvalho.
According to the expert, the use of carbon credits could be one of the financing solutions for Mozambique, which is cyclically affected by cyclones. “I don’t know the totality of what is being explored by the country in this area. This is one of the ways in which certain limits can be set for carbon emissions, which brings us back to a fundamental aspect, which is the information available on the emissions of companies and the country as a whole,” he pointed out.
Paulo Carvalho explained that the information available on carbon emissions is extremely important for managing and utilising them. In addition, this issue is linked to another, related to the certification of carbon credits, i.e. there is a need to create an organisation that can regulate the operation of this market.
“This is an issue that I have no idea whether or not it will be fully explored in Mozambique. But with the polluter pays principle in place, carbon credits appear to be a solution that is being explored globally,” said Paulo Carvalho.
In conclusion, the finance expert reiterated that the use of fiscal measures is one of the ways to force economic agents and all those involved in this matter, be they companies or individuals, to think properly from a perspective of economic rationality. “This is a principle that forces economic agents to think about what impact their activities have on the climate,” he said.
Climate finance aims to reduce carbon emissions and increase greenhouse gas sinks, reducing vulnerabilities and increasing the resilience of human and ecological systems to the negative impacts of climate change.