As Nigeria intensifies its efforts to respond to the global climate crisis, the Climate Change Act, 2021 marks a critical step in establishing a national legal and institutional framework for climate governance. However, unlike many jurisdictions that have adopted climate legislation with clearly structured carbon pricing regimes, emissions trading systems, or enforceable carbon budgets, Nigeria’s approach remains largely institutional and programmatic.
This Q&A provides a structured analysis of the Nigerian Climate Change Act using a comparative lens drawn from the typical features found in climate finance laws across other jurisdictions
1. Preambular and Policy Goals
Q: Does the Nigerian Climate Change Act set clear national climate ambitions?
A: Yes. The Act affirms Nigeria’s commitment to the Paris Agreement and establishes a goal of achieving a net-zero greenhouse gas emission target between 2050 and 2070. It also mandates the development of a long-term low emissions development strategy.
2. Scope & Targets
Q: Does the Act impose national or sectoral emission caps or carbon budgets?
A: The Act empowers the National Council on Climate Change (NCCC) to set carbon budgets and emission reduction targets, but it does not yet prescribe specific caps for sectors. These are to be developed through regulations and climate plans by ministries.
3. Financial Instruments
Q: Does the Act make provision for a carbon tax or emissions trading system (ETS)?
A: No, the Act does not directly establish a carbon tax or ETS. However, it enables the NCCC to recommend economic instruments, which could include carbon pricing, in future regulations. There is room for integrating carbon markets, especially under Article 6 of the Paris Agreement.
Q: Are there any mechanisms for climate finance or green bonds?
A: The Act mandates the development of a Climate Change Fund, to be financed by budgetary allocations, international climate finance, and private sector contributions — but detailed implementation rules are pending.
4. Institutional Frameworks
Q: Which bodies does the Act establish to oversee climate policy?
A: The Act establishes the National Council on Climate Change, chaired by the President, and supported by a Secretariat. It also creates roles for (a) Line ministries to develop sectoral plans; (b) A Director General of the NCCC; and (c) Climate change officers across MDAs
5. Administrative Procedures
Q: Does the Act provide for a carbon credit registry or MRV system?
A: While the Act mentions carbon budgeting and planning, it does not yet establish a national carbon credit registry or MRV system (Measurement, Reporting, Verification). We expect that these would be developed via NCCC frameworks or through coordination with the Voluntary Carbon Market Development Programme (VCMDP).
6. Compliance & Enforcement
Q: Are there penalties for non-compliance with climate obligations?
A: The Act does not yet specify strong enforcement mechanisms or penalties. However, it allows the Council to direct MDAs to act in line with the Act and may recommend consequences through policy or regulation.
7. Public Participation & Transparency
Q: Does the Act promote transparency and public accountability?
A: Yes, in principle. The Act provides for (a) Annual State of the Climate reports; (b) Sectoral submissions from ministries; and (c) Public access to national climate change plans.
Balogun Harold insights are shared for general informational purposes only and does not constitute legal advice. For tailored guidance, please contact our Climate Finance Lawyers at bhlegalsupport@balogunharold.com
