Legally Speaking: What’s the Fuss About Carbon Markets (and Why the Law Finally Cares))

How Do You Sell Air, and Who Gets Paid? 

Carbon markets operate on a premise both elegant and elusive: one credit equals one tonne of carbon dioxide either removed from or avoided in the atmosphere. But in practice, this is where the fog rolls in. Who verifies that tonne? Who decides if a project actually reduced emissions, or would have done so anyway? What if two entities claim the same credit? And more troubling: what if the community living on that land had no idea it was being sold? 

These are not theoretical concerns. They have played out across Kenya in full view. Take, for instance, the much-celebrated Kasigau Corridor REDD+ project, where forest protection was turned into carbon revenue or the Mikoko Pamoja mangrove restoration initiative, which pioneered community-led carbon trading on the coast. These were early successes. But then came projects that raised eyebrows, credits sold without proper disclosure to local landowners, or schemes that overstated their impact while quietly ignoring environmental justice. 

When The Law Catches Up to The Market 

We know this: equity is not a footnote in law, it is its conscience. It rests on maxims like ubi jus ibi remedium, where there is a right, there must be a remedy. Yet in carbon markets, where contracts span continents and communities often sign without understanding, rights are being defined faster than remedies are being created. Without clear legal frameworks, equity is not just challenged, it is rendered silent. That silence carries consequences. Communities may consent without clarity, participate without protection, or be present without power. The result is inequality. 

For years, Kenya’s legal framework for climate action was robust in principle but vague in application. The Climate Change Act of 2016 established institutional structures, but carbon markets existed in a legal grey zone, unregulated, unmonitored, and in many cases, unknown to government actors. It was a vacuum and in markets, vacuums don’t stay empty, they get filled with private interest.

But in 2023, Kenya enacted a decisive shift. The Climate Change (Carbon Markets) Regulations, developed under the Climate Change Act and gazetted that same year, now provide the first explicit legal framework for governing carbon trading activities in the country. These regulations do not merely suggest guidelines, they mandate them. Every carbon project must be registered with the Designated National Authority. There must be full disclosure of who is involved, how revenue will be shared, and whether local communities have consented. External verification bodies must be accredited. Benefit-sharing plans must be submitted and approved. And no project may proceed without national approval, even if it claims to operate in the voluntary market. 

These regulations were not created in a vacuum either. They are part of Kenya’s effort to domesticate its obligations under Article 6 of the Paris Agreement and to prevent the quiet recolonisation of its natural resources under the banner of carbon finance. 

Kenyan law has continued to step in. The Cabinet Secretary for Environment, Climate Change and Forestry recently published the Draft Climate Change (Carbon Trading) Regulations, 2025 and the Draft Climate Change (Non-Market Approaches) Regulations, 2025. These are currently undergoing public participation. The Carbon Trading Regulations, 2025 seek to provide an even more structured framework for both compliance and voluntary markets. Meanwhile, the Non-Market Approaches Regulations aim to guide Kenya’s participation in mechanisms under Article 6.8 of the Paris Agreement, which focus on climate cooperation beyond trading, such as technology sharing, capacity building, and financial support. 

It is tempting to view carbon markets as a climate solution. But they are also a financial product. When structured ethically, they shift capital toward climate-positive development. When left unchecked, they become loopholes dressed as progress. 

In Kenya, carbon markets have become both opportunity and risk.  

What Next? The Law, The Practice, and the People 

Kenya is now among a handful of African nations with a dedicated legal regime on carbon trading. But law is only as strong as its implementation. The coming years will test whether these regulations can hold up against loopholes, lobbying, and the sheer complexity of measuring air. 

What’s clear is that carbon markets are no longer on the legal sidelines. This is now a regulated space, with gatekeepers, checks, balances, and consequences. And once law enters the room, the game changes. It always does. 

Written by: Grace Waswa

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