Tinubu approves national carbon market framework, operationalisation of climate fund

The government said that the move aims to position Nigeria to effectively partake in the global carbon market and unlock between $2.5 billion and $3 billion yearly in carbon finance over the next ten years.

President Bola Tinubu has authorised the adoption of a national carbon market framework, the operationalisation of the climate change fund, and the reinstatement of the National Council on Climate Change (NCCC) in Nigeria’s annual budget.

The approval followed a presentation by the director general of the NCCC, Omotenioye Majekodunmi, during the second meeting of the council held on Thursday in Abuja.

A statement issued on Friday by the senior special assistant to the president on media and communications, Stanley Nkwocha, noted that the move aims to position Nigeria to effectively partake in the global carbon market and unlock between $2.5 billion and $3 billion yearly in carbon finance over the next ten years.

The development comes less than a fortnight before the 30th United Nations Climate Change Conference (COP30) scheduled to be held from 10 to 21 November in Belém, Brazil.

The Carbon Market

Carbon credits, or carbon offsets, refer to carbon emissions reductions or removals, measured in tonnes of carbon dioxide equivalent (tCO2e).

The carbon market allows investors and corporations to trade both carbon credits and carbon offsets simultaneously to help mitigate the climate crisis, while also creating new market opportunities.

During the COP29 last year in Baku, Azerbaijan, countries reached a consensus on the standards for the creation of carbon credits under Article 6.4 of the Paris Agreement.

Article 6.4, also known as the Paris Agreement Crediting Mechanism, enables countries to trade reductions in carbon emissions in a way that goes beyond zero-sum offsetting, to achieve their commitments under the Paris Agreement.

In 2023, the former director general of the National Council on Climate Change, Salisu Dahiru, stated that the “carbon trading” scheme under the country’s Climate Change Act will address some of the climate challenges in the country.

“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,” Mr Dahiru said at the time.

Climate advocates have said that poorly regulated carbon markets may lead to land grabbing and hand wealthy corporations the “license to pollute.”

Nigeria’s agenda for COP30

At the meeting, President Tinubu, represented by Vice President Kashim Shettima, said the approvals were part of measures to properly position Nigeria to exploit opportunities in global climate finance and the carbon market.

“Our focus at COP30 will be to harness all opportunities for financing climate-resilient projects and related interventions, particularly from the global carbon market,” Mr Shettima was quoted as saying.

He added that tackling climate change represents not only an environmental necessity but also “an opportunity to unlock new investments, jobs, and innovations” across energy, agriculture, and industry.

Mr Tinubu reaffirmed his administration’s commitment to mainstreaming climate action into national development, pledging to lead policies that protect citizens, boost the economy, and make Nigeria a haven for green investment.

Ms Majekodunmi disclosed that Nigeria is now ripe to tap new rounds of multilateral climate finance and highlighted three major recommendations: the adoption of a national carbon market framework to unlock up to $3 billion annually, operationalisation of the climate change fund for immediate mobilisation and utilisation, and the restoration of the NCCC budget line within the annual FAAC allocation to ensure financial stability.

The Minister of Finance and Coordinating Minister of the economy, Wale Edun, endorsed the recommendations, assuring the council of his ministry’s full support.