Carbon credits are instruments that represent one ton of carbon dioxide or greenhouse gas emissions removed from the atmosphere. This document outlines the carbon credit market, including the types (compliance and voluntary), segments (clean development mechanism, joint implementation, emissions trading, voluntary market), and how carbon credits work by allowing companies to purchase credits from those that have reduced emissions. The benefits of carbon credits and regulations around them in Nigeria are also discussed, as well as the qualifications, purchasers, and roadmap for implementing a carbon credit system in Nigeria through the new African Carbon Market Initiative.
2. OUTLINE
• INTRODUCTION
• TYPES
• SEGMENTS
• RELATED FACTS
• HOW DO CARBON CREDITS WORK?
• REGULATIONS IN NIGERIA
• BENEFITS
• QUALIFICATION CRITERIA
• WHO CAN PURCHASE CARBON CREDITS?
• WHERE CAN YOU PURCHASE CARBON CREDITS FROM ?
• CARBON CREDIT IN NIGERIA: ROAD TO IMPLEMENTATION
• CONCLUSION
• REFERENCES
3. INTRODUCTION
• The earth is undoubtedly warming globally
• This is largely as a result of emissions of carbondioxide(CO2)
and other green house gases (GHG) from human activities
• Such activities include industrial processes, fossil fuel
combustion, deforesetation etc
• To protect ouselves, our economy, and our land from the
adverse effects of climate change, we must reduce emmission
of CO2 and other GHGs
• The concept of Carbon credit will help to achieve this goal
4. INTRODUCTION cont’d
• Carbon credit is an instrument that represents one (1) tonne of
carbondioxide (CO2), or green house gas (GHG) emissions
removed from the atmosphere
• Carbon credits are given to companies whose activities benefit
the climate either by removing CO2 from the air or preventing it
from being emitted in the first place
5. INTRODUCTION CONT’D
WHAT IS THE CARBON MARKET?
• A diverse set of systems that are regulated in different
jurisdictions for trading green house gases pollution rights
• These rights called allowance or permit is the commodity that is
globally traded and gives the bearer the right to emit an
equivalent amount of CO2 emissions
6. TYPES OF CARBON CREDIT MARKET (CCM)
• There are broadly two (2) types of CCM in the world
1. The Compliance Market: which is developed as a result of
regulatory requirements
2. Voluntary Market: which allows private companies and
individuals to purchase carbon credits voluntarily
7. MAIN CARBON CREDIT MARKET SEGMENTS
• In principle, there are 4 main market segments:
1. The clean development mechanism (CDM)
2. Joint Implementation (JI)
3. Emissions trading
4. The voluntary carbon market
8. RELATED FACTS
• About 1.5 billion people across the globe still live without
electricity and 3 billion still cook and heat with primitive fuels
like wood or charcoal-UN, Sustainable energy for all
• In 2009, $162 billion was invested in renewable energy
projects, of which $44 billion was spent in China, India and
Brazil collectively, and just $7.5 billion on the many poorer
countries
9. RELATED FACTS CONT’D
• The majority of villages in Africa rely on kerosene lamps and
candles for their lightening
• These cost the average household US$40-80 each year and they
emit pollutants that pose serious health risks and can cause
house fires-SciDev Net
10. HOW DO CARBON CREDITS WORK?
• Typically in jurisdictions like the USA, and certain developed
nations where regulations exist with respect to the activities
governing carbon credits, it is the responsibility of the
governing body to create and allocate carbon credits
periodically to deserving companies and individuals within that
jurisdiction
• The number of credits issued to a particular company or
organisation represents its emmission limit
11. HOW DO CARBON CREDIT WORK CONT’D
• In certain jurisdictions, carbon credits are given to companies
whose activities pull out emmissions from the atmosphere
• Companies that want to compensate for their carbon foot print
may purchase carbon credits from responsible companies that
have accumulated carbon credits
12. REGULATIONS THAT AFFECT CARBON
CREDITS IN NIGERIA
• The United Nations Framework Convention on Climate change
(UNFCCC), The Kyoto protocol and Paris agreement’s
objectives is to stabilize Green house gases (GHG)
concentration in the atmosphere, to which Nigeria is a party
• The climate change act 2021 provides a legal framework for
achieving low GHG emissions and categorises climate change
actions into national plans and programs
13. REGULATIONS THAT AFFECT CARBON
CREDITS IN NIGERIA CONT’D
• Nigeria has launched its Energy Transition plan, which details a
roadmap to achieve net zero emissions by 2060
14. WHAT ARE THE BENEFITS OF CARBON
CREDITS?
1. It creates a monetary incentive for companies that consciously
embark on projects or devise methods to reduce GHG
emissions in the course of its activities
2. It creates a system for the proper measurement and verification
of emmission reductions
3. Addressing climate change will create immense dividend for
the African and Nigerian economy
15. HOW DOES A COMPANY QUALIFY FOR CARBON
CREDITS?
• In USA where regulations for carbon credit exists, the
companies that are eligible to earn carbon credits are companies
that:
- over time produce less GHG emissions
- embark on projects that prevent GHG emissions or aims to
remove GHG from the atmosphere
16. WHO CAN PURCHASE CARBON CREDITS?
• Individuals
• Companies
• Non-profit organizations
• Governments
17. WHERE CAN YOU PURCHASE CARBON
CREDITS FROM ?
• Directly from private companies with excess carbon credits
• Through a broker
• Climate trade market place
18. CARBON CREDIT IN NIGERIA: ROAD TO
IMPLEMENTATION
• On the eighth (8) day of November, 2022, the New Africa
Carbon Market Initiative (ACMI) was inaugurated at the United
Nations Climate Change global conference held in Sharm,
Egypt, with an objective to scale up on the production of carbon
credits across the continents
19. CARBON CREDIT IN NIGERIA: ROAD TO
IMPLEMENTATION CONT’D
• Nigeria and other African countries shared their committment
to collaborating with African Carbon Market initiative (ACMI)
to achieve this objectives, and it is expected that actual steps
will be taken in Nigeria to implement this objective
• It is expected that the Nigerian government will put in place a
framework for the implementation of a carbon credit system in
Nigeria
20. CONCLUSION
• It is not yet clear the categories of companies that will be
eligible for carbon credit in Nigeria
• It is however imperative for the Nigerian government to
develop a framework that will outline and govern the
implementation of carbon credits market in Nigeria in the
nearest future
21. REFERENCES
• Carbon Market Quick Facts; ACF 2012
• Carbon credit in Nigeria; Road to implementation by
Pavestone, November 2022
• www.wikipedia.com
• www.carboncreditmart.com
• www.ehow.com
• www.bcic.org.in