October 11, 2024
Olusola Oludiran
Climate change is a global challenge, prompting countries and regions to engage in several discussions about mitigation and adaptation strategies to climate change disasters.
In November 2023, seven continents of the world came together at the United Nations Framework Convention on Climate Change Twenty-eight, shortened as UNFCCC COP 28, held in the United Arab Emirates to further discuss sustainable solutions for climate chage disasters.
Nigeria. The acclaimed ‘Giant of Africa’, in furtherance of their commitment to climate action sold several dreams about addressing climate change in it regions at the conference.
After long deliberations, world leaders, about 200 parties came together with a decision on the world’s first ‘global stocktake’ to ratchet up climate action before the end of the decade, with the overarching aim of keeping the global temperature limit of 1.5°C within reach, came up with treaties and agreements during the 4-week long conference. One of the major highlights of these treaties is an agreement that signals the “beginning of the end” of the fossil fuel era.
Prior to this significant moment, in 2022, the Nigerian government came up with an Energy Transition Plan, following its commitment at COP 26 when it then president, Mohammadu Buhari announced the country’s commitment to acheiving netzero by 2060. The ETP is a summarised plan, strategies, and targets towards towards sustainable migratio from fossil fuels to cleaner energy sources.
Although there has long been a call for a global energy transition, it is important to learn how this transition will affect developing economies such like Nigeria and other fossil-oil dependent countries. This analysis examines Climate Change Mitigation Strategies and the Phase-Out of Fossil Fuels within Nigeria’s Energy Transition Framework.
Nigeria Energy Transition Plan: Realities and Pathways
As stated earlier, one of the highlights of COP 28 is declaring the “beginning of the end” of the fossil fuel era. In other words, phasing-out the production and use of fossil fuels as a means of climate mitigation is ambitious and effective. However, the rationale for achieving this is that each member state stays committed to their respective energy transition plan, perhaps, renewable energy policy.
In 2022, the Nigerian government launched an Energy Transition Plan (ETP) to underscore its mission to achieve net zero emissions by 2060, a commitment made by President Buhari at COP 26 in Glasgow. Nigeria seeks to invest an additional $410bn in funding by 2060 and has defined incremental funding of $10bn per annum to achieve this goal. The total fund required to reach net zero emissions by 2060 is $1.9 trillion (BudgIT, 2023).
Nigeria’s 2060 commitment has some implications that, depending on the actions made to meet the deadline, could either act as roadblocks or as a step forward. Over time, some of these ramifications are incorporated into Nigeria’s governance and sustainability processes.
Economic Implications
Undoubtedly, Nigeria is an oil-dependent revenue country. In a recent report by BudgIT, the decade-by-decade analysis revealed that crude oil revenue accounted for 70.5% of total government revenue annually between 1981 and 1990. In the following two decades, i.e., 1991–2000 and 2000–2010, an annual average of 78.1% and 78.9%, respectively, of total federal revenue came from oil sales.
The last decade (2011–2020) recorded a drop in the share of oil revenue, averaging 61.4%
With an estimated 1.9 trillion dollars needed to finance the switch to cleaner energy sources, the high cost of carbon financing is another significant obstacle to Nigeria’s energy transition. It is indeed a high cost of transiting from the current carbon energy sourc.
For instance, Nigeria cannot bridge the carbon financing gaps for the adoption of Electric Vehicles (EVs) solely through tax revenue and development assistance. Laudable as the ETP may be, funding the ETP will require Nigeria to step up efforts to de-risk private investment in clean energy solutions to close the viability gap for deploying clean energy services.
Research from Templars in 2022, shows that “A shared understanding between the public and private sectors of the risks and opportunities of the energy transition is critical to agreeing on an implementable strategy.”
Infrastructural Implications
Considering the level of infrastructural development required to completely transition to the Net Zero carbon level, the energy transition plan has been declared globally as the next industrial revolution of the world.
This industrial revolution for the energy transition requires new technological advancements, especially in electrification. However, Nigeria’s plan is to replace its diesel-generator-powered industrial sector with natural gas-fired power and a mix of renewables.
It also plans to give numerous incentives for independent power generation and fixed tariffs for energy generated from renewable sources (BudgIT, 2023). SEFORALL report shows that the Rural Electrification Agency with Rockefeller Foundation had already proposed a sum of $25.8bn as funds as required for Nigeria to reach universal access to electricity. This includes a plan for 5m solar home systems and 8.9 mini-grid connections expected to reach 106m people through access to 8.4GW
Industrial heating is another process that accounts for 93% of Nigerian industry’s energy-related emissions. But localisation is required for technologies like CarbonCure concrete, hydrogen production, and the infrastructure that supports them.
Institutional Implications
ETP may suffer a heavy blow when there is an absence of institutional partnerships to drive cleaner energy policies. The Energy Transition Plan document sets ambitious targets, yet lacks clarity on stakeholders’ engagements to provide feedback on net-zero target initiatives.
The Energy Transition Plan needs a multi-stakeholder approach to ensure effective implementation and reasonable assessment from non-state actors. Engagement with multiple stakeholders needs to be properly detailed to understand the plurality of views towards a fair and equitable energy transition process (BudgIT, 2023).
An open dialogue with institutions, such as labour groups, communities, industry associations, and other interested parties, will aid in identifying reform challenges and issues, preventing more serious consequences and defusing opposition to the phase-out of fossil fuels.
For instance, several Talanoa dialogues around fossil fuel phase-out and a strategic transition have emphasised the importance of strengthening institutional capacity to support economic diversification and a just energy transition process.
Subnational Government Implications
The political economy, both at the national and subnational levels, is very imperative for renewable energy regulations. While ensuring not to undermine national leadership in steering transition plan conversation, it is noteworthy to integrate subnational frameworks to support the programme. The federal government should seek every possible way to domesticate climate change mitigation strategies within the ETP framework to facilitate the phase-out of fossil fuels.
Conclusion
Despite all the challenges it may pose to developing countries, of which Nigeria is part, it is obvious that the phasing out of fossil fuels is not negotiable as far as the sustainability of the mitigation of climate change is concerned. As such, it is expected that a tenable government policy and political will be needed to implement the highlighted mitigation plans.
It could be argued that Nigeria’s proposed 2060 Energy Transition Plan has some merits, and should be implemented, given cooperation from relevant parties who have a similar desire to see the world take action against climate change.
Therefore, the onus rests on policymakers to be more strategic about the adaptability of the Energy Transition Plan, by looking at the critical sectors that will enhance all the necessary capacity to ensure that Nigeria does not take a backseat on climate matters. As Africa’s most populous country and an oil producer, the country must take the lead in the process. Proper planning around the suspected barriers must be in motion, such that it will falter in its proposition to gradual phasing out of fossil fuels
