The Federal Government of Nigeria has said that it will soon introduce a carbon tax and budgetary system for the country. It explained that the initiative was aimed at individuals and companies with high greenhouse gas emissions including energy generators and heavy industries.
Director-General (DG) of NCCC, Salisu Dahiru, revealed this on the sideline of the recent meeting with President Muhammadu Buhari at the State House, Abuja, when the NCCC obtained the approval to initiate key deliverables contained in the Climate Change Act, including the establishment of a carbon budget for the country.
It was learnt that carbon pricing could take many forms in practice, from taxes on fuels to carbon trading systems, such as that operated by the European Union (EU), under which businesses are allocated or must buy tradable permits to produce carbon di- oxide, with laggards forced to buy the excess permits of those that have cut carbon fastest.
He said the carbon budget in Nigeria would now provide allowances for every entity, whether government or private sector, in terms of how much emissions it may be allowed, adding that exceeding those emissions could also attract penalties.
According to him, the nature of these penalties is going to be contained in another deliverable that the Climate Change Act has also requested the council to do. It was gathered that FG through its agency is expected to impose charges to be paid by those that burn beyond a certain carbon emission limit, especially by primary emitters of carbon including diesel, petrol, and other goods and services that release carbon emission and greenhouse gas responsible for climate change.
According to the International Monetary Fund (IMF), a price of about $75 per tonne of carbon dioxide would be needed by 2030 to meet the goal of staying within 1.5C to 2C of global heating, set under the Paris agreement in 2015.
It further explained that the average price is only $3 a tonne for those emissions that do fall under the form of price. Dahiru said: “NCCC would also 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 an emissions reduction certificate, which can be translated into carbon credit, and then sold to potential buyers within the country and outside.
“Under the arrangement, the Federal Government is expected to set a price that emitters pay for each ton of Green House Gas (GHG) emissions.”