The United Nations Development Programme, UNDP, has said that the global carbon trade has grown into a market worth over $175 billion annually.
The UNDP Representative, Mr. Mohammed Yahaya, disclosed this at the inauguration of the Nigeria Emission Trading Scheme, ETS, on Tuesday, in Abuja.
Yahaya said that as of 2020, carbon dioxide emissions for Nigeria was about 126,9 million tonnes and coming mainly from burning of fossil fuel and heavy industries.
“For country like Nigeria, carbon trading should be looked for both medium and long-term objectives which at the end of the day will provide a lot of environmental benefits to the country.
“In some countries, carbon emission trading has been known to be source of generating money for nature-based solutions to climate change.
“This belief can be said to be the same for Nigeria in the nearest future,” he said.
Yahaya said that history of carbon markets could be marked as a great success story and an integral part of international climate change policies across the world.
He explained that carbon credits were provided for activities that promises to benefit the climate, either by removing carbon dioxide from the air or preventing it from being emitted.
The UNDP representative said that carbon trading was the procurement of such credits.
According to him, this is what has given birth to ETS, which has, however, given flexibility to governments to deal with vested interests.
“It has also allowed governments and decision makers to focus on the acceptability of the initial allocation in both domestic and international contexts.
“Emissions trading systems expose emitters to the external costs of emissions in the most flexible and least costly way,” he said.
Yahaya said that the design of the system needed to consider local contexts and regulations, as well as interlinkages with other policy priorities in each jurisdiction.
He, therefore, said that emissions trading was likely to be part of a broader policy mix to control emissions from the whole economy.
He added that an emission trading scheme was potentially one of the most powerful tools to build an effective global response to climate change.
“It is also a tool that will meet the Nationally Determined Contributions (NDCs) commitments that the Nigerian government has made to the UN Framework Convention on Climate Change.
The Minister of Environment, Barrister Mohammed Abdullahi, indicated that Nigeria has taken its first major step towards benefiting from the over $175 billion per annum carbon trade with the development of the Emission Trading Framework.
He said that the President Muhammadu Buhari-led administration had, over the years, demonstrated commitment towards reducing global warming.
Abdullahi recalled that Nigeria signed the Paris Agreement with the goal to limit global warming to well below 2 degrees, and preferably to 1.5 degrees Celsius, compared to pre-industrial levels in addition to reducing global greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.
The Minister said: “Towards collaborative achievement of this global temperature goal, the Federal Government of Nigeria has shown exemplary initiative in this respect.
“At COP 26 in Glasgow, H.E. President Buhari announced Nigeria’s Net Zero target of 2060, making Nigeria the first major developing country and the first in Africa to undertake such a commitment.
“His speech marked the beginning of a road map signalling to the international community that while greater responsibility is on the developed world, Nigeria is committed to providing leadership in climate governance both regionally and internationally.
“As you may all be aware, operationalisation of this Act started with the appointment of the pioneer Director General for the Climate Change Council.
“The government is further taking the lead on the establishment of a trading scheme, with legal framework provided in the Climate Change Act of 2021 for the reduction of greenhouse gas emissions through a cap and trade-based emissions trading schemes to meet the Net Zero target from today.
“We should all be reminded that a collective investment in addressing climate change will eventually provide immense dividends for the global economy alongside the economic co-benefits that come with it.
“Nigeria realises that its efforts on carbon management policy stands to gain from aligning our national emissions planning to international mechanisms such as Emissions Trading Scheme (ETS).”