Nigeria has taken a decisive step into the global climate-finance economy, with Bola Ahmed Tinubu approving a National Carbon Market Framework designed to unlock up to $3 billion annually by 2030, while aligning emissions reduction with economic growth.
The framework, endorsed by the Federal Executive Council, establishes the institutional and regulatory foundations for Nigeria to participate meaningfully in international carbon markets — a system that allows verified emissions reductions to be converted into tradable carbon credits.
Turning climate action into capital.
Carbon markets work on a simple principle: emissions reductions have value. Projects that cut or remove greenhouse gases — such as reforestation, clean cooking initiatives, renewable energy deployment, or methane capture — can generate carbon credits once independently verified. These credits are then sold to companies and institutions seeking to meet climate targets.
Nigeria’s new framework aims to move the country away from fragmented, project-by-project participation towards a coherent national system. Central to the plan are a national carbon registry, standardised measurement and verification rules, and clearer approval processes overseen by the National Council on Climate Change.
Officials argue this structure will boost investor confidence and ensure that Nigerian credits meet international integrity standards — a critical issue in a global carbon market that has, in recent years, faced credibility concerns.
Why now?
The timing reflects both economic pressure and opportunity.
With oil revenues under strain and foreign exchange inflows volatile, Abuja is looking for new, sustainable revenue streams.
Carbon finance — still small compared to fossil fuel income — offers diversification without abandoning development priorities.
The approval also aligns with Nigeria’s broader climate posture.
The country has committed to net-zero emissions by 2060 and has increasingly positioned climate finance as a way to fund energy transition, infrastructure resilience, and job creation without slowing growth.
In recent international engagements, the Tinubu administration has emphasised climate-linked investment tools, including plans for a national climate fund and platforms to attract private capital into low-carbon projects.
Learning from others.
Nigeria is not entering uncharted territory.
Several African economies have already laid down carbon market rules — with mixed results.
Kenya has moved aggressively, passing detailed carbon market regulations and actively courting project developers.
Ghana has focused on structured international cooperation under Article 6 of the Paris Agreement, positioning itself as a reliable partner for bilateral carbon trades.
South Africa, by contrast, has centred its approach on a carbon tax, allowing limited offset use within a tighter regulatory framework.
Nigeria’s model borrows from all three experiences: encouraging market participation, emphasising international credibility, and signalling that rules — not discretion — will underpin the system.
The upside — and the risks
If executed properly, the framework could deliver three major gains:
Foreign exchange inflows from the sale of high-quality carbon credits.
Domestic development benefits, particularly in rural areas through forestry, clean energy, and sustainable agriculture projects.
Climate credibility, strengthening Nigeria’s standing in global climate negotiations and investment circles.
But risks remain.
Globally, voluntary carbon markets have been criticised for weak verification, inflated crediting, and poor benefit-sharing with host communities.
Nigeria’s success will depend on whether it enforces transparency, prevents double-counting of emissions reductions, and protects land and community rights.
What comes next?
Markets will be watching implementation, not rhetoric. Key indicators will include the launch and public accessibility of the national registry, the speed at which credible pilot projects are approved, and whether Nigerian credits attract premium pricing or trade at a discount.
For now, the framework marks a clear policy signal: Nigeria intends to convert its climate assets into economic value. Whether the projected $3bn a year by 2030 becomes reality will hinge on governance, discipline, and trust — the currencies that ultimately matter most in carbon markets.
Published by Headlinenews.news
