Developing Nigeria’s Net Zero Economy: Carbon Markets, ITMO Framework and Article 6 Mechanism

In the pursuit to achieve the net-zero transition goal, the Nigeria Sovereign Investment Authority (NSIA) has strategically focused on developing the Voluntary Carbon Market (VCM) in Nigeria to facilitate the mobilization of necessary capital. From November 2023 to May 2024, the SIPA Capstone team partnered with NSIA to design a carbon market roadmap to support building Nigeria’s capacity for carbon transactions. Through literature research and stakeholder interviews, the SIPA team 1) pinpointed key domestic and international participants in private and public sectors and delineated their pivotal roles Nigeria’s VCM, 2) conducted case studies on carbon market frameworks in other African developing countries, and 3) researched on the Internationally Transferred Mitigation Outcomes (ITMOs) and Article 6 of the Paris Agreement. In the final report, the SIPA Capstone team recommended that 1) Nigeria should consider existing institutions and establish offices currently lacking to establish a robust institutional arrangement for VCM; 2) NSIA should leverage its networks to engage multinational organizations, incubators, and private investors into the capacity building of the carbon market; 3) Nigeria needs detailed guidelines and protocols to illustrate process of project development and carbon credit authorization and to clarify responsibilities of each party; 4) Nigeria should explore options such as subsidies, aggregation of projects, and payment arrangements techniques to help project developers overcome the steep verification costs. 

*This project was supported by Professor Jenik Radon.