From Juliana Taiwo-Obalonye, Abuja
In accordance with the recently adopted Energy Transition Plan and as part of the Climate Change Act, the federal government has finalised plans to introduce a carbon tax policy and financial framework for the nation.
The Director-General of Council on Climate Change (NCCC), Salisu Dahiru, made this disclosure to State House Correspondents after President Muhammadu Buhari, approved the Energy Transition Plan, to be driven by the NCCC, in accordance with the Climate Change Act 2021, at the weekend.
He said the agency sort and obtained approval to initiate key deliverables contained in the Climate Change Act, including establishing a carbon budget for the country.
A carbon tax, often known as a tax on greenhouse gases, can take two main forms: an emissions tax, which is based on how much an entity generates; and a charge on products or services, such a carbon tax on fuel, that are typically greenhouse gas-intensive.
Under the arrangements, the federal government is expected to set a price which emitters pay for each ton of greenhouse gas emissions.
In addition to bringing in money for the government, the tax will motivate people to change their fuel source, adopt new technology, and cut their emissions in order to avoid paying it.
Dahiru, 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. It will also look at 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 revealed that the Council also gave the Secretariat instructions to create a framework for carbon trading and a framework for the establishment of a climate change fund for Nigeria. This fund will be the primary revenue source and source of incoming funds for the running of the council and will be used to fund projects that will enable Nigeria to fulfill its obligations under the nationally determined contributions and the net zero target.
“The President also endorsed the Council as the Designated National Authority for the United Nations Framework Convention on Climate Change (UNFCCC) and the DG, NCCC as the UNFCCC National Focal Point, in line with the Climate Change Act 2021.
Dahiru noted that even though some of those things have already been mentioned in the Climate Change Act 2021, the council needed to sign off on those activities, to give the Secretariat the Go ahead, to start carrying them out. In essence, they include the operationalization of the office itself.
He said: “Because this is a climate change institution, we want to ensure that we comply with all the requirements of climate change compliance, as it is in the act, and also in Nigeria’s obligations under the NDCs.”
Regarding the net zero target, Dahiru stated that the institution must reflect its mandate in terms of its outlook and the way it conducts its business, including where it will stay. He also emphasized the need for the building to be as green as possible and to be a net zero building in terms of any potential carbon emissions.
“This means that the office complex must be seen to clearly demonstrate our commitments to renewable energy compliance for the main building and also reduction on its overall operations. And limiting, for instance, the use of paper, which we know comes from trees that have been felled.”
On gas flaring, the DG said part of the Council’s mandate is the implementation of the energy transition plan.
“This Energy Transition Plan, which is the first among many African countries, is predicated on the use of natural gas as the transition foil for Nigeria as the transition energy source, and we know that what has been flared, is actually natural gas. So, we also know that one of the added advantages that the energy transition plan is going to have is to help to close the energy or power or electricity gap that we’re experiencing in the country.
“We are going to use the energy transition plan as the main launchpad for capturing the gas needed, if you take the population of Nigeria, which is over 200 million, and we are already experiencing shortages in terms of electricity, and utilizing this gas for even domestic use alone is something that is going to be a big positive.
“So, the government is pursuing the implementation of this ETP as a very important project that will have multiple benefits, including reducing the energy gap.
“It will also help to find you know, economic utility or utilization for our abundant natural gas and also to create, you know, the stimulus for industries to also shift from diesel to start the use of natural gas as the main fuel for the generators and for the operations and therefore help to promote economic growth and also create jobs”.