By Laide Akinboade, with Agency reports
Experts on environment have predicted that Nigeria can make over N34 billion on sale of carbon credit the nation is able to implement Clean Development Mechanism (CDM) and Reducing Emission from Deforestation and Degradation (REDD), projects.
The Coordinator of UNISPACE and Global Oxygen Development (GOD), Mrs. Oluremi Adikwu-Bakare stated this while fielding questions with journalists, said the NGO has identified at least one CDM/voluntary carbon market in each of the 774 local government area council in the country.
The CDM and REDD is a partnership between developed and developing nations to reduce green house gasses (GHG), emission through forestry activities. Afforestation and reforestation, principally, carbon trading will assist in reconstruction of forest ecology and forest protection in Nigeria.
The actors of the forestry CDM is called developer of afforestation and reforestation projects.
According to her, “UNISPACe/GOD commends Nigeria for putting inq place a national REDD readiness plan with the first REDD project at advanced stage in Calabar.
Consequently we have identified at least one CDM/voluntary carbon market (VCM) bankable REDD/forestry project in each of the 774 local area councils.” Bakare continued,”in our projection at 20% scenario of deforestation avoidance projected rate at $15 per ton of carbon dioxide, Nigeria’s carbon credit sequestration capacity through the project’s implementation of these projects, it is estimated to generate equivalent of $229,605,000 USD per year, which translates to about N34.44 billion per year. She noted that UNISPACE/GOD has already enter into an agreement with Federal Ministry of Environment 2010. Those at the meeting included Dr. Victor Fodeke from Ministry of Environment and Mr. Joseph Collardeau
What Is Carbon Credit?
In step with the dramatic rise in C02 emissions and other pollutants in recent years, a variety of new financial markets have emerged, offering businesses key incentives — aside from taxes and other punitive measures — to slow down overall emissions growth and, ideally, global warming itself.
A key feature of these markets is emissions trading, or cap-and-trade schemes, which allow companies to buy or sell “credits” that collectively bind all participating companies to an overall emissions limit. While markets operate for specific pollutants such as greenhouse gases and acid rain, by far the biggest emissions market is for carbon. In 2007, the trade market for C02 credits hit $60 billion worldwide — almost double the amount from 2006.
* Size of global carbon credit market: Approximately $60 billion
* Amount of C02 the United States traded in 2007: Nearly 23 million metric tons
* Amount of C02 the EU traded in 2007: More than 1.6 billion metric tons
How It Works
Emissions limits and trading rules vary country by country, so each emissions-trading market operates differently. For nations that have signed the Kyoto Protocol, which holds each country to its own C02 limit, greenhouse gas-emissions trading is mandatory. In the United States, which did not sign the environmental agreement, corporate participation is voluntary for emissions schemes such as the Chicago Climate Exchange. Yet a few general principles apply to each type of market.
Under a basic cap-and-trade scheme, if a company’s carbon emissions fall below a set allowance, that company can sell the difference — in the form of credits — to other companies that exceed their limits. Another fast-growing voluntary model is carbon offsets. In this global market, a set of middlemen companies, called offset firms, estimate a company’s emissions and then act as brokers by offering opportunities to invest in carbon-reducing projects around the world.
Unlike carbon trading, offsetting isn’t yet government regulated in most countries; it’s up to buyers to verify a project’s environmental worth. In theory, for every ton of C02 emitted, a company can buy certificates attesting that the same amount of greenhouse gas was removed from the atmosphere through renewable energy projects such as tree planting.
Why It Matters Now
Industry watchers say carbon markets will continue to grow at a fast clip — especially in the United States, where Fortune 500 powerhouses such as DuPont, Ford, and IBM are voluntarily capping and trading their emissions. Even though a national cap on carbon emissions doesn’t yet exist in the United States, most consider it inevitable, and legislators are already pushing the issue in Congress.
It’s not just governments who are demanding emissions compliance — consumers want it, too. The commitment a company makes to curb its pollutant output is an increasingly public aspect of strategy. More and more employees are taking these factors into account when deciding where to work. A recent study from MonsterTRAK found that 80 percent of young professionals want their work to impact the environment in a positive way, and 92 percent prefer to work for an environmentally friendly company.
Why It Matters to You
Let’s say a company can’t afford to modify its operations to reduce C02. Purchasing carbon credits or offsets buys it time to figure out how to operate within C02 limits. For others, it can be a cost-effective tool to help lower emissions while earning public praise for the effort. Each credit a company buys on the Chicago Climate Exchange — usually for about $2 — means another company will remove the equivalent of one metric ton of carbon.