By Aliu Akoshile
The launch of Nigeria’s carbon market framework at the Abu Dhabi sustainability summit in January marks an important milestone in the country’s climate policy journey. It exemplified a new strategic pathway for Nigeria’s climate resilience and green economy.
President Bola Tinubu who lunched the framework in the presence of the summit convener and UAE President, Sheikh Mohammed bin Zayed Al Nahyan, and other world leaders, was intentional. He declared boldly that Nigeria’s plan to actively participate in the fast-growing global carbon economy while addressing its own climate challenges.
With increasing flooding, desertification, coastal erosion, and irregular rainfall as well as scorching temperatures across the country, the need for structured climate action is certainly more urgent now than ever. And by embracing the carbon market option, Nigeria will be connecting its climate ambition to global direct investment to catalyse sustainable economic empowerment.
The framework is supported by two essential instruments that were designed to guide and regulate Nigeria’s carbon trading activities. These are the national carbon market activation policy and the national carbon registry. Together these frameworks provide the required structure for a credible and transparent carbon market that is already projected to contribute about $3billion annually to Nigeria’s economy.
At the heart of the framework is the goal of turning emission reductions into measurable economic value. Carbon markets allow countries and companies to earn revenue by reducing or removing greenhouse gas emissions. For Nigeria, this means that sectors such as energy, agriculture, forestry, waste management, and oil and gas can develop projects that reduce emissions and then sell the resulting carbon credits in domestic or international markets.
A key feature expected within the system is a cap-and-trade approach, where limits are placed on emissions while companies are allowed to trade emission allowances. In practice, this means that businesses capable of reducing their emissions more efficiently can sell excess carbon credits to other companies that may find it more difficult or costly to meet reduction targets. This market-based approach encourages innovation while gradually lowering overall emissions.
At the level of accountability, the introduction of the national carbon registry is particularly important for ensuring transparency. The registry will serve as the central database where carbon credits are recorded, tracked, and verified. By keeping a clear record of all carbon transactions and emission reductions, Nigeria can maintain the integrity of its carbon market and build trust among investors, project developers, and international partners.
Beyond transparency, the carbon market framework also aims to create economic opportunities across multiple sectors of the Nigerian economy. For example, renewable energy developers working on solar mini-grids or wind projects can generate carbon credits by displacing diesel-powered electricity. These credits can then be sold in carbon markets, providing additional revenue that supports the expansion of clean energy projects.
Nigeria’s large agricultural sector also stands to benefit significantly. Climate-smart farming practices such as agroforestry, improved soil management, and sustainable land use can generate carbon credits while improving farm productivity. This creates a pathway for rural communities and farmers to participate in climate finance while strengthening food security.
Another major opportunity lies in the country’s vast forest resources. Protecting and restoring forests can generate carbon credits through activities such as afforestation and avoided deforestation. In regions where deforestation has become a serious challenge, these projects can help protect biodiversity, support livelihoods, and contribute to Nigeria’s national climate commitments.
For the framework to work effectively, strong monitoring, reporting, and verification systems will be required. These mechanisms ensure that emission reductions are real, measurable, and permanent. Independent verification and regular reporting will help ensure that Nigeria’s carbon credits meet international standards, making them attractive to global buyers.
Education and awareness will also play an essential role in the success of the carbon market. Many businesses and local communities are still unfamiliar with how carbon trading works. Even the journalists who are expected to amplify the narratives in engaging storytelling are also to be trained on the nuanced perspectives of the subject.
Through capacity-building programs, workshops, and policy engagement, stakeholders can better understand how to develop carbon projects and participate in the market. The special adviser to President Tinubu on climate change matters, Comrade Yussuf Kelani last week made a bold statement with the launch of a novel nationwide tour on climate change awareness.
With a projected annual inflow of about $3billion over the next decade, Nigeria is primed to unlock new streams of climate finance that can support infrastructure development, renewable energy expansion, environmental protection, and community-based climate-smart innovations. When this happens, Nigeria would have emerged a major player in the global carbon economy while advancing its transition to a more sustainable and resilient future.
Aliu Akoshile, an environmental journalist and Executive Director of Climate Africa Media Initiative & Centre, writes via aliu.akoshile@camic-ngo.org
