Source: Review of African Political Economy (ROAPE) | Published: 2026-06-22
Category: ODA·개발금융 | Keywords: debt
The closure of Koko Networks at the beginning of February 2026 elicited an interesting range of reactions in the country. Some cast suspicion on the Kenyan government, claiming that the company was denied the letter of authorization (LoA) because it refused to pay rent to the political class. Others took on a more sympathetic view of the government, remarking that Koko’s closure should indicate to climate investors that the country is “high integrity not high yield” and that national interest precedes developer profit.
Koko Networks, which was founded in 2013 and launched its first network of bioethanol fuel ATMs in 2019, folded its operations on 31st January 2026, announcing the move through a brief message sent to customers. Shortly afterwards, on 3rd February 2026, Trade CS Lee Kinyanjui stated that Koko was denied the LoA because it sought to claim Kenya’s entire carbon credit allocation in the compliance carbon markets. Two days later, Tom Price, founder and former president of EcoSafi—a clean cooking company that operates in Kenya and Uganda—wrote a LinkedIn post claiming that Koko’s carbon credits were flawed but that ultimately, the company’s closure was “a silver lining for carbon integrity”, and that the Government of the Republic of Kenya was simply doing its job in trying to ensure that its carbon credits were of as high quality as their other exports including tea and coffee. Indeed, Kenya has positioned itself as a hub for carbon finance. At COP 27 in Sharm el-Sheikh , Egypt, President Ruto referred to carbon offsets as the country’s “next significant export .” At the same conference, Kenya became one of the seven pioneer countries to sign on to the Africa Carbon Markets Initiative, which seeks to scale carbon credit production via voluntary carbon market activation plans.
KOKO Networks belongs to a long line of ineffective carbon offset projects
Carbon offsets fund projects that either sequester CO2 (that is, remove carbon dioxide from the atmosphere and store it), or lower carbon emissions. Such projects typically include renewable energy initiatives, energy efficiency projects such as clean cookstoves, reforestation, waste and landfill management, and carbon storing agricultural practices. The origins of carbon offset projects go all the way back to the 1980s. In 1989, amid a severe drought in the United States that pushed global warming to the front pages for the first time, American utility and power generation company Applied Energy Services (AES) devised the idea that to reduce the emissions generated by its coal-powered plant in Connecticut, it could plant trees around the plant to absorb the carbon emitted by the coal-powered plant. Except for one problem. It would be impossible to plant 52 million trees in the densely populated area of Connecticut where the plant was located, which is the number of trees that was calculated as necessary to absorb the carbon emitted by the plant. But since the atmosphere was a global common, AES executive Sherly Sturges proposed that the trees could simply be planted elsewhere. Thus, AES initiated the first land-based carbon project where they would support an agroforestry project in Guatemala, planting 52 million trees over the course of 10 years with an expected 16 million tons of carbon sequestered.
Sturges’ idea caught the world’s attention. In October 1988, a Times Magazine headline referred to the AES’ carbon offset project as an “Antidote for a Smokestack”, and in the article, the planting of 52 million trees in Guatemala vs the coal-powered plant in Connecticut was said to form a “healthy environmental equation.” Over the next decade, the practice of carbon offsetting came to be enshrined in international climate treaties such as the 2005 Kyoto Protocol, which introduced the Clean Development Mechanism (CDM) that allowed “developed” countries to meet emission reduction targets by investing in emissions reduction projects in “developing” nations. However, in the years that followed, demand from compliance markets reduced, leaving leftover supply in the CDM’s carbon offset schemes. From this leftover supply, a market for voluntary carbon trading emerged. Alongside the UN’s carbon system, other sources of accreditation such as the Gold Standard (2003), American Carbon Registry (2007), and Verra (2007) were established. Demand for carbon offsets, however, went back up after the 2015 Paris Agreement, as major corporations pledged to achieve carbon neutrality and help meet the goal of limiting the global temperature increase to 1.5C.
The effectiveness of carbon projects, however, has largely been questioned. Developers often inflate their project’s impact. The AES carbon project, for example, only offsets about 10% of its targeted emissions. The project failed as food shortages arose from the enormous quantities of land set aside for forestry causing arguments to break out between farmers, some who simply began refusing to plant trees. Cookstove projects in particular have been found to have an average offset achievement ratio of 10.8%. It is extremely difficult to measure the amount of atmospheric carbon reduced by most carbon projects. First, projects must prove additionality, which means that they must have a project baseline that is an estimate of how much carbon would have been emitted had the project not existed—what, as journalist Heidi Blake writes, is a counterfactual that is nearly impossible to prove. In cookstove carbon projects, emissions reductions are calculated by assessing adoption, usage, and stacking rates—where adoption refers to the percentage of efficient stoves in use, usage to the number of meals cooked on the stove, and stacking to the percentage of meals cooked on the project stove relative to baseline stoves. These calculations also rely on the fraction of non-renewable biomass (fNRB)—that is, the proportion of woody biomass used as fuel that exceeds a landscape’s natural regeneration rate—as well as estimates of baseline fuel consumption. In the case of Koko Networks, as Price points out, the company allegedly overestimated the fraction of non-renewable biomass (using 98% instead of 38%), relied on a distorted fuel baseline that assumed users previously cooked primarily with charcoal (despite 67.2% of households in Nairobi—where Koko was expanding most rapidly—using LPG), and reported inflated usage figures.
Ultimately, most of those who support the government’s decision to deny Koko the LoA attribute the issue to the “integrity” of carbon credits that Koko networks used. Others, as previously noted, criticize the government’s callousness and lack of consideration for the 1.3-1.5 million households (a likely inflated figure) and the 700 jobs that were lost. These customers and employees may be the latest victims of carbon offset projects, which often mobilize the realities of Global South residents—such as the urgent need for clean cooking solutions in Kenya—to justify financial flows that ultimately enrich corporations and their intermediaries. Communities whose land is managed by the Northern Rangelands Trust under the Northern Kenya Grasslands Carbon Project (NKCP) for instance, received $234,000 from the sale of carbon credits that are estimated to have sold for somewhere between $21 million and $45 million.
Carbon projects are Social-ecological fixes
Carbon projects function as socio-ecological fixes—that is, interventions that “directly engage with and resolve, mitigate, or postpone a structural impediment—including any environmental one—to sustained capital accumulation.” This concept draws from Marxist geographers such as David Harvey, who argue that capital, in its pursuit of infinite expansion, is shaped by internal and structural contradictions that constantly have it looking for fixes. These contradictions then become inscribed in the material world which offers temporary “fixes” for capital to continue its expansion. Africa, for example, was incorporated into the global capitalist economy through colonialism, which alleviated crises of overproduction and underconsumption by opening new markets and providing access to cheaper raw materials. These new geographies also functioned as what Harvey calls a “spatial fix,” as the construction of infrastructure enabled the productive absorption of overaccumulated capital.
While the contradictions mentioned above are built around the social relations of capital, a second set emerges around the ecological contradictions of capitalism. Capitalism, as geographer James Moore has argued , is an ecological regime whose expansion is dependent on nature-based processes that it cannot reproduce. Limits arise in the capacity of the planetary ecosystem as a source of material inputs and a sink for unwanted by-products such as carbon emissions. Production under such conditions creates an unbalanced relationship between production and the natures that sustain it, generating a “metabolic rift.” In its quest for infinite expansion, capitalism dematerializes the economy, abstracting it into exchange values while obscuring the material ecological foundations upon which it depends. The result is an underproduction of the ecological conditions necessary for continued accumulation. Yet the recognition of the use-value of ecosystem “services,” such as carbon sequestration or technologies of decarbonisation has not curtailed this logic. Instead, it has expanded the terrain on which capitalist actors can assign exchange value to include decarbonisation services; presenting these services as “fixes” that permit continued extractive production while also opening up new frontiers for accumulation.
Through such ecological fixes, capital is simply looking to take advantage of crises/socio-natures of its own making to enhance profitability. In Kenya and other Global South contexts , these crises are rooted in their colonial formations. As Frantz Fanon observed, colonial economies were not integrated into a unified national economy; development occurred primarily in zones of extraction and white settlement, while other regions were left structurally underdeveloped. Post-independence, the Kenyan government sought to address the human and physical capital deficits inherited from colonial rule. Colonial investment had been highly selective, concentrated primarily in agricultural zones occupied by Europeans. Because of the limited participation of Africans in the colonial economy, the depletion of public coffers due to World War shocks, and the costs of the Emergency period, Kenya could not rely on significant domestic savings. Like many other Global South states, it turned to debt financing. The government took on ambitious development plans, promoting import-substitution industrialization. As a result, Kenya’s industrial sector averaged an annual growth rate of 9.5% between independence in 1963 and 1979 and expanded its output by three and a half times.
Simultaneously, the state pursued an aggressive rural development program aimed at ensuring that “people as a whole can participate in the development process.” This growth trajectory was disrupted by the sharp rise in global interest rates triggered by the collapse of the Bretton Woods system, the oil shocks of the 1970s, the Global North inflation that followed, the corrective Volcker reforms of 1979, and the ensuing Third World debt crisis. Under the Bretton Woods system, the US had promised monetary stability pegged to the dollar, which was in turn backed up by gold. Underlying this arrangement was the promise that the US would maintain enough gold reserves to back up world trade in dollars. In the period following the independence of the Global South however, demand for dollars skyrocketed as newly independent countries sought foreign investment for their industries and infrastructure, as well as foreign aid. Additionally, the financing of wars such as the Vietnam War called for an injection of