The Federal government has approved the introduction of carbon tax system in Nigeria.
Director General of National Climate Change Council (NCCC), Dr. Salisu Dahiru, told journalists on Monday that the carbon tax is one of the key deliverables contained in the Climate Change Act that needed approval from the Federal government.
Dahiru disclosed this to State House correspondents after meeting with President Muhammadu Buhari, at the Presidential Villa.
NatureNews recalls that Dahiru had initially informed last year about the introduction of the carbon tax while speaking during the technical workshop on Agro Climate Resilience in Semi-Arid Landscapes (ACReSAL) project in Lagos.
He had announced that the carbon tax is necessary because it will help to clean up the environment and refresh the air.
Corroborating this in Abuja on Monday, the DG said the carbon tax on greenhouse gases come in two broad forms, namely; an emissions tax, which is based on the quantity an entity produces; and a tax on goods or services that are generally greenhouse gas-intensive, such as a carbon tax on gasoline.
Under the arrangements, he said the federal government is expected to set a price which emitters pay for each ton of greenhouse gas emissions.
According to him, the tax, apart from helping to generate revenue for government, will encourage consumers to take steps to switch fuels, adopt new technologies and reduce emissions to avoid paying the tax.
He said “That is now going to provide allowances for every entity, whether government or private sector, in terms of how much emissions it may be allowed, and exceeding those emissions could also attract penalties.
“What will be the nature of these penalties, these penalties are going to be contained in another deliverable that the Climate Change Act has also requested the council to do.
“That is to develop a framework for a carbon tax system in Nigeria where projects are being implemented in the country.
“These projects are capable of reducing overall carbon or greenhouse gas emissions. The harvest of these emissions reductions are normally contained in what we call a emissions reduction certificate, which can be translated into carbon credit, and then sold to potential buyers within the country and outside.”
He disclosed that the Council also instructed the Secretariat to develop the framework for carbon trading, and also to develop the framework for establishing the climate change fund for Nigeria.
He said that these initiatives will serve as the main source of revenue and inflow of funds that will be used for running of the council as well as to undertake projects that will help Nigeria to fulfil all his obligations under the nationally determined contributions, as well as under the net zero target of 2060.