Our Mandate on Climate Change
Nigeria, like other parties to the United Nations Framework Convention on Climate Change (UNFCCC) and other treaties aimed at stabilizing greenhouse gas (GHG) emissions (i.e. the Kyoto Protocol and Paris Agreement), participated actively in the 2021 UN Climate Change Conference (COP26) which took place between October and November 2021 in Glasgow.
The goals of COP26 were for countries to renew their commitment to securing net-zero targets by mid-century and to keep the 1.5 degrees target within reach; protect communities and natural habitats; mobilize finance to deliver on the first two goals; and to work together to deliver on the various goals.
During COP26, Nigeria committed to achieve net-zero by 2060, and barely a week after the conference, President Muhammadu Buhari signed into law the Climate Change Act, 2021 (the Act), which was passed by the National Assembly in October 2021.
In order to protect the Nigerian environment and ecosystem from the ravages associated with climate change and to achieve the reduction of greenhouse gas emissions in Nigeria, The Act seeks to provide a framework for achieving low GHG emissions and to mainstream climate change actions into national plans and programmes.
The expectation is that the implementation of the Climate Change Act will enable Nigeria to achieve a reduction of greenhouse gas and carbon emissions to internationally acceptable levels. Private entities should be aware of their obligations and put in place the necessary structures that will ensure they are compliant with the Climate Change Act.
The Climate Change Act establishes the National Council on Climate Change (the “Council”) which is vested with the powers to develop policies and make decisions on all matters concerning climate change in Nigeria.
The Federal Government of Nigeria took a big step to address the climate change challenge by establishing its Emission Trading Scheme (ETS), to provide recommendations that will guide the transition to a green economy.
The conversation for the Emissions Trading Scheme started with concerns around global warming and Greenhouse Gases (GHG) resulting in a series of urgent legislations and innovative strategies to reduce greenhouse gas emissions. In December 1997, the
Kyoto Protocol was adopted by 192 parties to operationalize the United Nations Framework Convention on Climate Change (UNFCCC). Part of the commitment of parties under the Kyoto Protocol is to accept limits and targets to limit or reduce GHG emissions with compulsory targets. Nigeria is showing leadership on the African front in the launching of the trading scheme in line with the legal framework provided in the Climate Change Act of 2021 for the reduction of greenhouse gas emissions through a carbon market approach to meet its Net Zero target.
The launching of the Emission Trading Scheme (ETS) signals the commencement of activities that would lead to the establishment of the Nigeria Emissions Trading Scheme, sensitization of the public, and ensuring coordination with other relevant arms government/development partners under the leadership of the Federal Ministry of Environment, with the active collaboration of the Federal Ministry of Trade & Industries.
Emissions Trading, also known as ‘cap-and-trade’, is a market-based trading system that aims to provide economic incentives for countries and businesses to reduce their total carbon emissions, where a regular or government sets a limit or cap on the maximum levels of emission and creates permits or allowances for the allowed unit of emission to be traded under the cap. When a government allocates units of emission at the start of a compliance period, firms can trade their permits or allowances according to their emission needs. Firms with more emissions will buy more permits while firms that stay under their allocated unit or emit less can sell permits. Also, firms that expect not to have enough permits must either cut back on their emissions or buy permits from another firm, creating a new commodity in the form of emission reductions or removals.
In August 2022, the Nigeria government announce its intention to adopt the Emissions Trading Scheme (ETS), and establish the Nigeria Emissions Trading Scheme which provides policy recommendations and measures for meeting the country’s net zero greenhouse gases emission target, in line with the Climate Change Act, 2021.
This development will provide critical first steps in investigating the impacts of GHG emissions on all sectors, from transport to energy, aviation and even construction and deliver effective mechanism for carbon pricing for Nigeria.
Rosehill Group (RHG) has been mandated by the President and the National Council on Climate Change (NCCC), to collaborate with, and render technical and strategic support to the Council with respect to the actualization of the Council’s mandate to establish a framework for the development of an orderly and structured Emission Trading System (ETS) for both voluntary and mandatory carbon markets, adopting strategies and other measures aligned with national aspirations and development plans.