By Abbas Nazil
Nigeria’s National Carbon Market Framework (NCMF) 2024 marks a key step in operationalising the 2021 Climate Change Act and aligning with Article 6 of the Paris Agreement.
The framework aims to generate up to 124.7 MtCO₂e of emissions reductions and attract $2.5 billion in market value by 2030.
While the NCMF establishes institutional guidelines, fiscal incentives, and benefit-sharing mechanisms, it remains a non-binding policy framework.
Implementation relies heavily on ministerial discretion, memoranda of understanding, and voluntary cooperation among stakeholders, limiting enforceability, credibility, and investor confidence.
To address these gaps, the proposed Decarbonisation Bill (DB) seeks to establish a legally empowered National Decarbonisation Authority (NDA).
The NDA would oversee licensing, compliance, monitoring, reporting, verification (MRV), and administration of the National Green Transition Fund, transforming policy aspirations into enforceable law.
Institutional overlaps, including the National Council on Climate Change and Climate Change Secretariat, currently risk bureaucratic delays and fragmented oversight.
The Decarbonisation Bill consolidates authority under the NDA, ensuring coordinated governance, statutory MRV, and transparent benefit-sharing, thus enhancing market integrity and legal certainty.
Fiscal provisions under the NCMF, such as tax incentives and VAT exemptions, lack legislative backing, while the DB institutionalises structured finance mechanisms, de-risking private investment and supporting equitable local development.
The framework also insufficiently addresses methane emissions, a potent short-term contributor to global warming, whereas the DB explicitly incorporates methane management, capture, and utilisation strategies.
By embedding a Just Transition Fund, statutory oversight, and accountability mechanisms, the Decarbonisation Bill strengthens social protection, investor confidence, and Nigeria’s international credibility in carbon markets.
Together, the NCMF and Decarbonisation Bill transition Nigeria from aspirational climate policy to a rule-of-law-based carbon economy, unlocking domestic and global climate finance, enabling sustainable development, and positioning the country as a leading carbon market hub in Africa.
This legal and institutional evolution is vital for achieving measurable emissions reductions, equitable outcomes, and long-term climate resilience.
