Nigeria pioneers a billion-dollar voluntary carbon market

The federal government of Nigeria is pioneering a billion-dollar worth of voluntary carbon market on the African continent.

This was made known in a statement by the Office of the Vice President.

“It is an innovative climate change solution which will create, over the period of energy transition, millions of new jobs in Nigeria alone, according to estimates of the international experts.”

The establishment of the voluntary carbon market (VCM) is one of the efforts of Nigeria to help achieve the global net zero emissions target.

Led by a 14-member steering committee of African leaders, CEOs, and carbon credit experts, the Africa Carbon Markets Initiative (ACMI) seeks to expand Africa’s participation in the global VCMs.

Members include the Vice President of Nigeria, the former President of Colombia, the President of the African Development Bank, U.N officials, USAID, the Gates Foundation, and other international private sector participants.

ACMI will be launched during the upcoming COP27 (International Climate Change Conference of the Parties) in Egypt in November. It will lead the way in making carbon credits an effective tool to reduce emissions while financing green initiatives across Africa.

The launching is in collaboration with several organizations namely: Global Energy Alliance for People and Planet, Sustainable Energy for All, UN Climate Change High-Level Champions, and UN Economic Commission for Africa

This African carbon credit initiative will promote the use of eco-friendly energy sources both for domestic and industrial purposes.

ACMI estimated that Nigeria itself can generate as much as 30 million carbon credits every year by 2030. Using a price of $20 dollars per credit, the country’s VCM will be worth over half a billion dollars per year.

“At this level of production, the industry could potentially support over 3 million Nigerian jobs… And Nigeria has only a portion of Africa’s total potential – the impact for the continent as a whole could be far greater.”

The number of jobs supported will be from the time when the Nigerian VCM will start to kick off until 2060. It‘s also the period covering the nation’s energy transition.

Part of this vision is the nation’s goal to pioneer climate solutions that will benefit the continent and the world. And one key solution is the generation and sale of carbon credits. This financial instrument offers Africa a great potential to be explored.

Nigeria’s carbon credit potential will come mostly from the forestry sector and household devices. Projects in both sectors deliver significant climate benefits.

For instance, carbon credits from clean cookstoves and solar lamps help expand access to clean energy and improve health outcomes. Likewise, forestry carbon credits will help conserve the nation’s rich biodiversity and support sustainable livelihoods.