The Director General of the National Council on Climate Change Council (NCCC), Salisu Dahiru, has explained that the “carbon trading” scheme captured under the country’s climate change Act will address some of the climate challenges in Nigeria.
Mr Dahiru made this known Wednesday during a workshop to assess Nigeria’s carbon pricing initiatives in Abuja.
“As far as Nigeria is concerned, the carbon trading scheme is an aspect of our national policy and also a national priority to put in place all the measures needed to address all our mitigation challenges,” he said.
The official noted that carbon pricing is one of the foundational works needed to prepare Nigeria for participating in the emissions trading scheme and that the process had begun.
He explained that the validation workshop would familiarise Nigerians with the processes of understanding carbon pricing to meet Nigeria’s input.
“We will ensure that every opportunity for harvesting emissions reduction certificates from ongoing activities in Nigeria is linked to NCCC,” Mr Dahiru noted.
He said: “Carbon trading is not going to be limited only to the NCCC but to all the MDAs or sectors interested in pursuing projects that can end carbon credit.”
Background
Less than a month after Mr Buhari announced a 2060 net-zero emissions target during the COP26 held in Glasgow (Scotland) in 2021, he signed into law the Climate Change Act, which commits the Federal Government to measurable action plans for climate change mitigation and adaptation.
This subsequently led to the appointment of Mr Dahiru as the pioneer DG and CEO of the NCCC.
The Climate Change Act provides a framework for achieving low GreenHouse Gas (GHG) emissions and mainstreaming climate change actions into national plans and programmes.
Aside from the establishment of the NCCC, which shall have the power to make policies and decisions on all matters relating to climate change in Nigeria, a key provision of the Act is that the NCCC will collaborate with the Federal Inland Revenue Service (FIRS) to develop a mechanism for “carbon tax and carbon trading” in Nigeria.
It is expected that proceeds from these, among other sources of funds, will be used to fund the Climate Change Fund proposed by the Act.
Carbon taxes are environmental taxes levied on precise carbon units (or a proxy) by governments to reduce carbon emissions (through fossil-fuel-based energy) from producing or consuming goods and services.
According to the United Nations estimates, as of May 2021, 33 carbon taxes had been implemented by countries, including South Africa, to serve as a financial tool to fight climate change.
Likewise, emission trading, a form of carbon taxing, is an incentive-based technique where the government sets a cap on the maximum level of emissions and issues permits or allowances for each unit of emission, which people and companies can trade.
The primary reason is to make people choose between cutting back on their GHG emissions or buying or requesting trade permits from the government or other companies.
This implies that emissions could be traded like commodities.
Meanwhile, in February, the federal government hinted that it had concluded plans to unveil a carbon tax policy and budgetary system for the country, in line with the recently approved Energy Transition Plan, as part of the Climate Change Act.
On 24 August 2022, Nigeria launched the Energy Transition Plan (ETP), a multipronged strategy developed to achieve net-zero emissions from the nation’s energy consumption.
Prospects
Mr Dahiru expressed optimism that the workshop would facilitate one of Africa’s robust carbon trading systems and lay the foundation for stakeholders in Nigeria to work towards achieving this target.
“We are very familiar with the flooding in 2022, we are seeing signs of the flooding, especially with the recent one at Lugbe, which tends to highlight that nobody can escape the impact of climate change,” he noted.
He said: “It calls for concerted and collective efforts to ensure that Nigeria is fully positioned to take advantage of the opportunities in climate change and adaptation, not only for us but for the government to invest in private sectors to see what is in carbon trading.”
On his part, the Coordinator of the West African Alliance on Carbon Market and Climate Finance, Ousmane Sarr, who was represented by the director general of African Energy-Environment, El Hadji Diagne, said that the objective of the West African Alliance was to harness the coordination of West African negotiators in the carbon market.
He said carbon taxes are one of the effective means to achieve a reduction in carbon emissions.
“This is why most developed countries that have agreements with the Paris Club consider zero carbon emissions. Carbon pricing may also support adaptive nature and also contribute to poverty reduction from the revenue that comes from it,” he said.
