By Ben Eguzozie
With its Climate Change Act of 2021, the first stand-alone comprehensive climate change legislation in West Africa, Nigeria, approaches climate action with seriousness. But to operationalise the Act requires measures, including $17.7bn annually to fulfill the country’s NDC commitment.
Nigeria, in 2021, enacted a climate adaptation-specific legislation. It is considered the first stand-alone comprehensive climate change legislation in West Africa and among few both globally and regionally. The Act demonstrates the seriousness of Nigeria with which it is approaching climate action.
Experts at the Global Climate Litigation particularly describe the Nigeria Climate Change Act (NCCA) as having the potential to become a strategic tool for climate change advocacy and a legal foundation for potential climate litigation in the country. However, there are essential measures required to operationalise the NCCA.
Major among these is the fund needed by the country to fulfill its NDC unconditional pledges. In particular, it emerged at the inaugural Africa Climate Summit (ACS) and Africa Climate Week (ACW) held last September in Nairobi, Kenya, that Nigeria would need at least $17.7 billion every year to fulfill its Nationally Determined Contribution (NDC) obligations. But Salisu Dahiru, the Director-General of the Nigeria Council on Climate Change (NCCC) is upbeat on investment accretion.
Speaking at the ACS/ ACW in September, he said: “We are looking at opportunities to attract investments-inflow for capital projects. The idea is that the majority of these efforts are coming in anticipation of what is going to be available under Article 6 (of the Paris Agreement) —the internationally transferred mitigation options, which provide opportunities for carbon trading and many project developers across the globe.
Africa, and particularly Nigeria, being the largest and the one with the most population, also provides ample opportunities for this investment”. Dahiru notes that the Nigeria climate adaptation legislation has given comfort to investors, practitioners, project developers, verifiers, and the eventual carbon market that is going to emerge.
On carbon trading, Nigeria has identified three building blocks: establishment of a carbon registry, establishment of exchange, and establishment of validation processes.
Additionally, he said Nigeria is looking inward to raise enough capital for investment in the Green project that will earn carbon credit. “We do recall that the National Council for Climate Change has entered a memorandum of understanding with two principal bodies in Nigeria — the Nigerian Sovereign Investment Authority (NSIA) and Infrastructure Corporation (InfraCorp). These are major key players in infrastructure development, and they provide very viable options to raise capital. So far, NSIA and Vitol have already launched a $50 million project development line for a voluntary carbon market project in Nigeria. That is just the first step. Other private financial institutions in the country are doing the same thing. We also recently got a mission from the Green Climate Fund (GCF) which has assured that, in addition to what the multilateral development agencies are serving us as development entities for projects, they will commission and accredit the Development Bank of Nigeria (DBN), which will be the first in-country entity to be accredited under the Green Climate Change Fund, which also brings to the fore, opportunities that many projects now within Nigeria for climate finance investment are going to come up”.
For Dahiru, Nigeria’s potential and journey so far are “looking good”. He said the country has sown seeds and is in the process of harvesting them as a benefit. He listed that there were bilateral engagements at the ACS/ ACW, including the Netherlands and Ban Ki-Moon Group.
Carbon trading, carbon taxing models
On carbon trading, Nigeria has identified three building blocks: establishment of a carbon registry, establishment of exchange, and establishment of validation processes. In the exchange, it is collaborating with the country’s Securities and Exchange Commission (SEC) to align it with the Nigerian Exchange Group (NGX). The Nigerian Exchange will be adding carbon as a commodity for trading. Already agreed upon, the registry would come under the rudimentary registry as the REDD Registry which commenced much earlier under the guidance of the forest carbon partnership facility and the UNRRA Programme. “The remaining aspects will be those validation processes; those processes will also require some individuals that have been satisfied by the UNFCCC. Putting them together afresh in Nigeria will require a lot of time and a lot of resources. We are in the process of forging partnerships with those existing within the African shoreline or globally that are acclaimed five-star validation institutions and have a framework agreement with them to work with Nigeria for two to three years after which they exit and then we continue with the Nigeria-made carbon system,” said Dahiru.
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