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What are the Laws and Policies Influencing the Implementation of Clean Development
Adanma N. J. Anizoba
achieving the goal of sustainable development. One of the methods of achieving sustainable
country’s economy. The Kyoto Protocol mandates countries which are parties he agreement to
be used to achieve this is the Clean Development Mechanism (CDM). As plentiful as the benefits
are that come with the implementation of CDM projects, many developing countries including
Nigeria are yet to successfully operate such projects at maximum capacity and efficiency.
Estimates by the World Bank have visibly shown that many African countries have been
unable to live up to the great emission reduction credits potentials within its confines. With over
3,200 clean energy projects and about 740 million tons of greenhouse gas emissions reduction
per year, the continent still has only 2% share of global CDM pipeline. Studies showed that
Nigeria is currently the world’s leading gas-flarer with almost 2 billion standard cubic feet a day
being flared yet several barriers impede the implementation of CDM projects to curb or mitigate
the impact of these activities (Ademoroti, 2009). This paper discusses the legislative and
regulatory framework concerned with climate change and Clean Development Mechanism, the
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challenges CDM project implementation faces in Nigeria and possible practical solutions to these
challenges.
TABLE OF CONTENTS
Table of Contents--------------------------------------------------------------------------------------------2
List of Abbreviations----------------------------------------------------------------------------------------3
List of Tables-------------------------------------------------------------------------------------------------3
Introduction---------------------------------------------------------------------------------------------------4
Conclusion--------------------------------------------------------------------------------------------------16
References---------------------------------------------------------------------------------------------------17
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LIST OF ABBREVIATIONS
ER Emissions Reduction
JI Joint Implementation
KP Kyoto Protocol
LIST OF TABLES
Table 1: Projects in Nigeria registered by the CDM Executive Board, accessed online via
https://cdm.unfccc.int/Projects/projsearch.html
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Introduction
In 1997, the Kyoto Protocol was adopted as an agreement under The United Nations
emission reduction targets for Annex I countries. Annex I countries are recognized as developed
or industrialised countries which are responsible for the currently rising levels of GHG
(greenhouse gases) emissions in the atmosphere. The Kyoto Protocol mandates these Annex I
countries to reduce their GHG emissions by 5.2 percent against 1990 levels during its first
commitment period from 2008 to 2012. Because of these conditions, the Kyoto Protocol places a
higher burden on these developed countries under the principle of “common but differentiated
responsibilities”. These means that all countries both developed and developing, have a role to
play in the task of emission reductions but recognized that these countries have varying social,
mechanisms by which they can meet their targets; these include the Joint Implementation(JI),
developed countries in exchange for Emissions Reduction Units and International Emissions
Trading involves the carbon trading in the energy market. The Clean Development Mechanism is
one of the instruments under the Kyoto Protocol, which mandates Annex I countries to establish
and sustain various low- carbon emission projects (ER- ‘Emission Reduction’) in developing
countries such as Nigeria and in return receive carbon credits (CERs – Certified Emission
Reductions) for successfully implemented projects. The goals that CDM aims to achieve are to
help developed (Annex I) countries reach their targets under the Kyoto Protocol and promote
In 2004, Nigeria ratified the Kyoto Protocol, but the country has not taken any steps to
commit to fully implementing the mandate in any laws, standards or policies. The country
cooperates with these processes by ensuring that the emissions of greenhouse gases by gas
flaring and other activities are monitored and measured. In 2011, the National Adaptation Plan of
Action to the UNFCC was drafted and forwarded; and the government drew up the Presidential
awareness among stakeholders about the effects of climate change and the need to adopt clean
technologies in various projects and processes. By 2015, the total number of CDM projects in
Nigeria was approximately 12 and included project activities in various industries such as hydro,
biomass energy and landfill gas. The economic sustainability of implementing CDM projects in
any region is also measured by the value of CER’s generated by CDM projects in the region
relative to the combined GDP of the geographic region. In Nigeria CER’s arising from CDM
projects account for 44.87% of the GDP which is slightly higher than the overall average of 40%
CDM and other carbon market-based instruments play an important role in promoting
sustainable development and addressing some social and environmental issues. Resources need
for executing these mechanisms such as finance and sustainable technologies have over the years
For a project activity to be registered as a CDM project with the UNFCC, it must be
submitted, and a registration fee must be paid by the designated operational entity. According to
the 2015 CDM pipeline report, a total number of 12 CDM projects in Nigeria have been
identified by UNEP and these project activities are spread across different industries (CDM,
2015). These projects cut across energy, construction, transport, agriculture and waste disposal
amongst various others. These projects are recognized as CDM because they bring about long-
term benefits that help mitigate the effects of climate change and result in sustainable
development. “In Nigeria, the criteria used to measure sustainable development, include the
following: the project must lead to real and verifiable emission reduction, ensure investment,
economic growth protection and increased income, enhance efficient energy development and
utilisation, bring about environmental and financial benefits, facilitate speedy transfer of
technology and result in real, measurable and long – term benefits related to climate change
Utilization
Project (oil
field flaring
reduction)
3 12/10/2009 Efficient Fuel Nigeria Germany 31309
Wood Stoves
for Nigeria
(energy
efficiency in
households)
4 16/10/2010 Recovery and Nigeria Norway 256793
Marketing of
gas at the
Asuokpu/
Umutu
Marginal field
(oil field
flaring
reduction)
5 15/10/2010 Municipal Nigeria Belgium, 281781
Solid Waste Ireland,
(MSW) Norway,
Composting Luxembourg,
project in Portugal
Ikorodu,
Lagos
(landfill gas)
6 12/07/2012 LFG project Nigeria France 129932
in Nigeria
7 29/10/2012 Afam Nigeria 550234
Combined
Cycle gas
Turbine
Power Project
8 18/12/2012 Lafarge Nigeria France 166557
WAPCO
Partial
Substitution
of alternative
fuels in
cement
facilities in
Nigeria
9 24/12/2012 Recovery and Nigeria 288147
Utilisation of
associated gas
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from
Obodugwa
and
neighboring
oil fields in
Nigeria
10 28/12/2012 Kainji Nigeria Belgium, 873474
Hydropower Germany,
Rehabilitation Sweden, Italy
Project
11 19/07/2013 Golden Sugar Nigeria United 59421
(Submitted) 30MW High Kingdom of
08/11/2013 Energy Great Britain
(Rejected) Efficient and Northern
Combined Ireland
Heat and
Power (CHP)
System in
Apapa, Lagos,
Nigeria
12 16/12/2014 OML58 IPP Nigeria 264994
Gas Fired
Generation
Project
Table 1: Projects in Nigeria registered by the CDM Executive Board, accessed
The main regulatory agencies or bodies that deal with environmental issues include the
following:
Housing and Urban Development) which is the chief regulatory body in the country and
oversees the activities of all other agencies involved with environmental laws and
protection. The regulatory authority for CDM projects, Department for Climate Change
3. The Nigerian Oil Spill Detection and Response Agency (NOSDRA) which is responsible
for detection and timely and effective response to oil spillages in the country and the
There are various departments within these agencies and other parastatals that are
charged with environmental regulation and the establishment of the renewable energy industry.
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Nigeria does not have any nationally recognised institutional framework for the
implementation of CDM and no standard policy exists regarding renewable energy but there are
key forms of legislation in place regarding environmental regulation in the country. Some of
these include:
(NESREA) (Establishment) Act 2007 and the 33 Regulations created under the
Ministry of Environment under section 34 of the Act under the 1999 Constitution
of the Federal Republic of Nigeria (section 20), which revoked the Federal
II. The Environmental Impact Assessment (EIA) Act (Cap E12 LFN 2004) which
III. The Harmful Waste Act (Cap H1 LFN 2004) that prohibits the carrying,
IV. The Endangered Species (Control of International Trade and Traffic) Act (Cap E9
LFN 2004) which caters for the conservation and management of wildlife and the
V. The National Oil Spill, Detection and Response Agency (NOSDRA) Act 2006
concerned with the availability of the resources, equipment and machinery for the
co-ordination and implementation of the National Oil Spill Contingency Plan for
VI. The National Park Services Act (Cap N65 LFN 2004) which deals with the
VII. The Nigerian Minerals and Mining Act 2007 which revoked the Minerals and
Mining Act No. 34 of 1999, and guarantees the regulation the exploration of solid
VIII. The Water Resources Act (Cap W2 LFN 2004) which aims at promoting the
IX. The Hydrocarbon Oil Refineries Act which is concerned with the licensing and
X. The Associated Gas Re-Injection Act deals with gas flaring activities by oil and
gas companies and prohibits, without lawful permission, any oil and gas company
from flaring gas in Nigeria and stipulates the penalty for breach of permit
conditions.
XI. The Nuclear Safety and Radiation Protection Act that is concerned with the
regulation of the use of radioactive substances and equipment that emits and
XII. The Oil in Navigable Waters Act concerned with the discharge of oil from ships
and vessels and prohibits the discharge of oil from ships into territorial waters or
shorelines.
Other national policies that promote clean energy development and the implementation of
CDM include the National Electric Power Policy of 2001, the Electric Power Sector Reform Act
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of 2005, the National Energy Policy of 2003 developed by the Energy Commission of Nigeria
(ECN) and the National Oil and Gas Policy of 2004 produced by the Bureau of Public
Enterprises in 2004 which enacts provision for the establishment of a National Gas Grid and
investments in the promotion and use of renewable energy sources including research and
development. Another policy is the National Biofuels Policy of 2007 which the NNPC was
mandated to see it through; to establish a booming biofuel industry. Other policies and reforms
include the Petroleum Industry Bill (PIB), the National Gas Master Plan, the Roadmap for Power
In 2005, the ECN along with UNDP developed the Renewable Energy Master Plan
(REMP) which addresses the development challenges Nigeria faces by exploiting renewable
energy and clean energy development. In 2006, the National Policy and Guidelines on
Renewable Electricity was put in place by the Federal Ministry of Power. Alongside this was the
in the fuel mix for electricity generation by at least 5 percent of total power generation and at
Some of the challenges facing the CDM implementation and the advancement of policies
regarding clean energy development and subsequently execution of CDM projects are lack of
access to energy, delayed progress of energy sector reforms, and lack of access to conventional
finance. The lack of or there say, the slow pace in progress in clean energy development in
Nigeria is mainly because of a defective institutional framework in the country. Private sector
participation in the implementation of CDM projects in Nigeria has also been minimal,
change serves as a threat to socio-economic growth and sustainable development in the country.
Inadvertently, there is a lack of capacity or political will to implement the policies and
programmes in the country. Some of the policy documents like the REMP and the National
Energy Policy are yet to receive legislative attention or presidential endorsement. Even the
Electric Power Sector Reform Act passed in 2005 has not been fully implemented.
Another major challenge for CDM project implementation is the lack of access to
finance, both domestic and international as stated above. The business math behind CDM
projects as enunciated under Kyoto Protocol is that carbon finance can only turn borderline
projects into viable ones if there is proof they will result in significant GHG reduction. Hence
CDM, according to Durando Ndongsok of First Climate in his write up on CDM IN AFRICA -
Facing the hurdle of conventional Finance, is not “a panacea for projects that make no financial
sense at all”. Research has shown that access to finance plagues the development of CDM in
Africa, as well as in Nigeria. The economic viability of most emissions reducing ideas is a huge
factor in the ability of the parties to access funds for the projects. Most times, these ideas tend
The lack of capacity building also is a great barrier to the successful implementation of
CDM in Nigeria. Investors are not likely to be attracted to project ideas that have not been
proven to feasible for economic viability. It is necessary to perform the necessary feasibility
studies and have the right knowledge base to undertake CDM projects. Issues such as bottlenecks
in the governmental or institutional regulation, inadequate knowledge base and lack of support
services come into play when the need arises for capacity building CDM project implementation.
Active participation of stakeholders like the regulatory bodies involved is very important, as they
can ensure that adequate infrastructure and resources needed for execution are made available.
Without this intervention, there are likely to be glitches during the pre-project, mid-project or
launch phases or the project is likely not to be implemented at all. This is the case seen in the
non-implementation of the Renewable Energy Mater Plan that was never endorsed by the
Federal Executive Council or passed into law, according to a 2013 IIED (International Institute
Furthermore, another challenge that could be taken note of is the complex technical
framework involved with registering eligible CDM projects under the Kyoto Protocol (KP) of
the UNFCC. This may serve as an obstacle to proffering suitable CDM projects that can be
accepted and implemented, therefore, hindering the development of CDM in Nigeria. Due to
these circumstances, these requirements pose a problem for most CDM projects in Nigeria, as
most of them are small and are deemed to be unattractive to potential investors or ineligible as
their contribution to emissions reduction may be very insignificant, in the larger carbon market.
They are therefore categorised as not being economically viable or financially feasible.
the global view of the country and its current socio-economic and political conditions. The
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perception of global energy market may see huge investments in CDM projects in the country as
very risky. The expected growth in CDM development and implementation in Nigeria is almost
lacking as most investors are cautious of taking such financial risks in the country. Consequently,
it is paramount that the government take necessary action by establishing and fully
implementation regulatory policies that assure potential investors of their investment security.
These challenges emphasise the need to overhaul the existing legislative and regulatory
framework at all levels in the country. This will encourage clean energy development investment
and CDM project finance, resulting in the growth of Clean Development Mechanism (CDM) in
Nigeria.
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Conclusion
yet there are few key legislative instruments in place to help influence or implement clean
response to several international obligations and incentives and concerns such as the need to
develop power generation in the country, the policy framework to promote and support clean
Investment in CDM projects is probably the most ideal method or instrument that will
increase the participation of stakeholders in the implementation of the CDM process. This will
involve both private and public-sector investments in clean energy sources and technologies that
have minimal or no negative environmental impact and aid in the reduction of GHG (greenhouse
gases) emissions. “Investment into clean energy systems provides the most effective and
optimally efficient path to an increased CDM participation in Nigeria and hence an effective
As a country that has the highest levels of gas flaring, Nigeria contributes significantly to
greenhouse gas emissions, affecting climate change. This has seen global temperatures rising,
but even locally or regionally. As a developing (non-Annex I) country, Nigeria can benefit from
have several implemented CDM projects and a legislative and policy framework that supports
this development. Currently, such a supportive system does not exist in the country’s energy
laws and policies. Recommendations are that the government and stakeholders should create
awareness on renewable energy sources and energy efficiency, establish a clean energy
development agency in charge of project finance and develop inclusive energy policies that act
References
November 2009.
https://cdm.unfccc.int/Projects/pac/howto/CDMProjectActivity/Register/ index.html
http://climatechange.gov.ng/training-materials-at-cdm-capacity-enhancing-workshop-released/
Ejide, S. & Co. Environmental law and practice in Nigeria: an overview. Accessed
transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
Fodeke, V. The Nigeria DNA: CDM Project Registration Process and Criteria. 2011
https://doi.org/10.1186/2192-0567-2-15.
Timilsina, G. & Gouvello, C. & Thioye, M. & B. Dayo, F. (2010). Clean Development