Nigeria’s Vice President, Prof Yemi Osinbajo, SAN, has given reasons Nigeria should show adequate commitment to ending carbon emission despite the fact that Nigeria and indeed Africa countries are the least carbon emitters in world.
Osinbajo who delivered the keynote address entitled “Nigeria’s transitioning to green energy,” at the 60th anniversary of the Oil Producers Trade Section (OPTS), a sub-group of the Lagos State Chamber of Commerce and Industry (LCCI), held in Lagos, said Nigeria and African countries are major victims of climate change issues and energy poverty and by extension extreme poverty. Besides ensuring good and healthy environment, Nigeria can earn money by carbon emission reduction through carbon credits and reduce its huge debt through Debt for Climate Swaps.
He said: “The most consequential subject globally in the next few decades will undoubtedly be climate change. Already, it is evident from so many adverse climate occurrences – floods, desertification, rising water levels, and record high temperatures that there is a global climate crisis. The obvious solution to the crisis is to stop carbon emissions and use green energy.
“Coal and fossil fuels are major pollutants. That being the case, it is proposed that countries and corporations should gradually reduce the use of these high pollutants and instead use renewable energy such as solar and wind, hydro and completely stop the use of these carbon emitters by the agreed target date of 2050.
“Now most countries including Nigeria of course agree that we must reduce global emissions to zero, in our case by 2060. We are major victims of the effects of climate change, but there are a few important issuesthat we have flagged to our wealthier brother-countries in the global north. The first is that we, in the developing world, are faced with two, not one crisis. One is climate change and the other is extreme poverty, the cause and consequence of which is energy poverty. Or the fact that lack of access to electricity for millions is a cause of deepening poverty.
“The second is that African countries are the least emitters of carbon today – less than one per cent of cumulative carbon dioxide (C02) emissions and even if we triple electricity consumption in African countries (aside from South Africa) solely through the use of natural gas this would add just 0.6 per cent to global emissions. So a lot of the flooding and adverse weather events that we are experiencing here are from emissions caused by the wealthier countries.
“The third is that the defunding of gas projects in order to force gas rich countries like Nigeria to stop using gas and use renewables instead is faulty. These proposals to ban the funding of fossil fuel projects make no distinction between upstream oil and coal exploration; and gas power plants for grid balancing. Also no economy in the world has been known to use renewables, solely, to industrialize. Solar power simply does not have the base load capacity yet for industry.
“Fourthly, stopping the use of gas means that we cannot use LPG for clean cooking stoves to replace the use of kerosene, firewood and charcoal, which are dirtier fuels widely used for cooking and other domestic purposes particularly in the rural areas. The use of firewood means deforestation, cutting down trees and of course desertification and then the loss of our carbon sinks.
“The fifth is the double standards that wealthier countries have adopted on this issue. Today in the wake of the energy crisis, many European nations have made recent announcements to increase or extend their use of coal fired power generation through 2023, and potentially beyond. This is in violation of their climate commitments, and analysis suggests that this will raise power sector emissions of the European Union (EU) by four per cent – a significant amount, given the high base denominator of EU emissions.
“The sixth and perhaps most crucial point is that we must take quick and informed actions in our national interest. We must take the threat of no investments in fossil fuels including gas seriously. For example, many European and other global North countries are setting aggressive targets for use of electric vehicles and the banning of combustion engine vehicles. Soon there may be only a few countries using combustion engines. It is also evident that while the Russia invasion of Ukrainian has shown the double standards in not allowing public funding for fossil fuel projects, the wealthier nations are still of the view that this is the correct policy and that even if public funding is to be allowed financing should not go beyond 2035.”
On Nigeria’s energy transition plan, Osinbajo said a comprehensive, data-driven and evidence-based plan, designed to deal with the twin crises of climate change and energy poverty, has been put in place.
He noted that the Federal Government anchored the plan on key objectives, including lifting 100 million people out of poverty in a decade, driving economic growth, bringing modern energy services to the full population and managing the expected long-term job loss in the oil sector due to global decarbonization.
Given those objectives, the plan recognizes the role natural gas must play in the short term to facilitate the establishment of base load energy capacity and address the nation’s clean cooking deficit in the form of liquefied petroleum gas (LPG). Gas is of course critical to integrating a greater share of renewable energy in Nigeria’s energy mix. Also natural gas (methane) is an important chemical feedstock especially for ammonia production for fertilizers.
To achieve these objectives by 2060, we would need $410billion or $10billion per annum above business as usual spending. Where do we get this from? In addition to conventional capital flows both from public and private sources local and international, we also made the case that we should be on the G7 Climate partners list which should attract significant funding (I have held recent meetings with World Bank, US Treasury Secretary and only last week with the US special envoy on climate change), he added.
Osinbajo pointed out the importance of Nigeria’s full participation in the global carbon finance market, adding that voluntary carbon markets can play a significant role in directing private capital into climate action. How do they work? A developer sets up a project that avoids certain emissions (for example methane capture from landfills or removes carbon from the atmosphere by reforestation or replacement of diesel generators with solar power. The project is registered under a verified carbon standard (VCS), gold standard, and validation and verification is done by an independent body.
Carbon credits equivalent to the mitigation achieved are issued to the project subject to verification. The developer then sells the carbon credits to companies, governments or individuals seeking to compensate and or neutralize their emissions. Some Nigerian companies have already been doing lucrative carbon avoidance or removal projects that have yielded carbon credits. Amazon energy were contracted to do a gas flare down project for an international oil company (IOC) in Kwale, Delta State and the IOC utilized the carbon emissions reduction for carbon credits, he said.
Also, given the escalating debt situations of many developing countries including Nigeria, especially in the aftermath of COVID 19 and the Russian- Ukrainian conflict, Osinbajo suggests that Debt for Climate Swaps be brought into the climate finance mix. Debt for Climate (DFC) swaps are a type of debt swap where bilateral or multilateral debt is forgiven by creditors in exchange for a commitment by the debtor to use outstanding debt service payments for national climate action programmess. The creditor can use the transaction as a contribution to its on Nationally Determined Contributions (NDCs). So we can increase the fiscal space for climate related investments and reduce our debt burden.
On private sector participation in transitioning Nigeria to green energy, the Vice President suggested three ways to do so. They include greater involvement in the crucial conversations about what an economically just transition to zero emissions should be; the implementation of the Energy Transition Plan. For example, the off-grid Solar space in Nigeria is becoming one of the most exciting in the world. We have programmes such as the FGN’s Solar Power Naija, the Nigerian Electrification Programme with the World Bank Group, & the African Development Bank and also the Rural Electrification Fund providing almost $1billion in financing and subsidies to drive 10 million connections.
“We are also working on clear guidelines for on-grid Solar before COP-27 to initially provide the structure for the rollout of at least 1,000 megawatts (MW). We are particularly pleased with the good work that All-On and Konexa have been doing all with funding from Shell (one of your key OPTS members), we also have NNPC partnering with the Rural Electrification Agency to rollout Solar Mini grids and Solar Home Systems across the country. We encourage OPTS to take the lead in Solar to help drive improvements in our energy mix and also accelerate the transition to having “energy” companies not just oil companies get involved in climate finance, especially the voluntary carbon markets, among others.
