How can philanthropy move carbon markets forward?

At a time when foundations are being asked to do more across a range of development issues, the role of philanthropy in carbon markets may not be top of mind. But during the African Development Bank annual meetings in Abidjan, Zeph Kivungi, Africa climate director at the Children’s Investment Fund Foundation, or CIFF, made the case for why that should change. Speaking during a panel focused on de-risking and scaling carbon market investment in Africa, Kivungi argued that philanthropic capital has a crucial role to play in scaling up investment in carbon markets — particularly when it comes to creating the conditions that make private sector involvement viable. Kivungi acknowledged that some might question why a children’s foundation is involved in carbon markets. But for CIFF, he said, ensuring that children can survive and thrive includes safeguarding the environmental conditions they need to grow up healthy and productive. That means investing in climate resilience and the infrastructure that supports it. Kivungi laid out three specific ways philanthropy can unlock progress in carbon markets: enabling environments, project preparation, and implementation accountability. 1. Building the enabling environment The first area is policy and planning — the foundational elements that don't necessarily make business sense but are critical to getting projects off the ground. “Whether we are doing sector analysis to understand what kind of assets we are talking about, whether we are doing the gap analysis to see what we are up against, or whether we are supporting governments to also make sure their financial policies are coherent with the global sort of infrastructure,” Kivungi explained, philanthropic capital can fill these early gaps. Without that early investment, he said, many governments will simply walk away. “Usually, some government wants to say, ‘Show me where the money is coming from.’ So they will not see that money unless there is an enabling environment that would cost money to get that to happen.” 2. Capital before capital flows A second opportunity is in project preparation — the phase where projects need just enough support to become investment-ready. “It takes money to develop a carbon asset. It takes sometimes quite a bit. And we are in a market which has either been ignored or just never been developed,” he said. Philanthropic capital can step in early to fund due diligence, feasibility studies, or initial structuring — costs that private investors often won’t absorb unless they’re already convinced of a project’s viability. “Everybody is waiting for projects to get to that stage unless somebody is involved,” said Kivungi. “And that somebody most of the time would be those with high risk at the time — concessional capital.” 3. Accountability in implementation The final role for philanthropy lies in implementation oversight. Citing examples from Kenya and Zimbabwe, Kivungi pointed out that many projects on the continent have been driven bilaterally or by wealthy backers — but when something goes wrong, there’s often no accountability. “Philanthropy has a role to watch the sort of ... transparency questions, holding the feet to the fire to make sure what you promised is what you're getting,” he said. That accountability, he added, isn’t just about protecting communities — it’s about ensuring that governments and project proponents all uphold their responsibilities. “To do that is not policing. It's to make sure that we watch those things before money flows.” From one-off deals to ecosystem thinking Underlying Kivungi’s message was a broader critique of how carbon markets — and climate finance in general — are currently approached. Rather than moving from one transaction to the next, he argued for a “portfolio-based approach” and systemic thinking. Philanthropy, he said, should help move the market from “very specific transaction basis to an ecosystem kind of thing.” The goal, he suggested, is to move away from a model where philanthropy must intervene in every transaction. Instead, “what would it take for philanthropic capital to flow once, and create an environment that does not require them to come to every transaction?” Kivungi asked. Philanthropy can help design and seed long-term structures — but it must also push for systems that last. “Because our capital is very limited. And we don't want to just spend, and then that's gone. We want to invest and say we participated in creating the foundation of this infrastructure. And we are glad that it is now what it was supposed to be.”