African sustainable development agenda and the mitigation of climate change can immensely be supported by carbon trading. However, realizing the full potential of carbon trading requires overcoming complex political-economic challenges surrounding the continent. This chapter aims to inform policymakers seeking socially responsible approaches to establishing effective carbon trading mechanisms in Africa, and further spurs interdisciplinary research on climate justice in the Global South. The chapter provides an analytical framework encompassing four critical dimensions: distributional impacts, power dynamics, institutions, and alignment with sustainable development priorities in African carbon markets. It addresses how powerful actors and vested interest groups in the energy transition could pave ways for the effective development and implementation of carbon trading schemes in Africa. The analysis also considers how thoughtfully designed carbon markets can incentivize climate-friendly development pathways by directing finance towards clean energy and other sustainable priorities in the region.