Introduction
With growing awareness of emissions and their impact on our planet and communities, governments and corporations are increasingly required to demonstrate environmental responsibility. Stakeholders are demanding concerted efforts to reduce, and wherever feasible, avoid activities that contribute to cumulative atmospheric emissions. Recognizing that certain emissions are difficult to abate, compensation or direct removal from the atmosphere becomes necessary. Carbon credits play a crucial role by assigning financial value to emissions reduction initiatives, thereby incentivizing corporations and governments to invest in low-carbon technologies and sustainable practices.
As carbon credits gain traction as a market-based mechanism to address climate change, significant prospects emerge for economic growth, environmental stewardship, and sustainable financing, particularly in emerging economies. Nigeria is actively exploring opportunities to facilitate carbon trading, attract climate-related funding, and support the country's transition to net-zero emissions, aligning with global climate commitments and national development goals.
This article, “Carbon Credits in Nigeria – What are the Prospects?”, delves into the key drivers influencing the global carbon market and examines the evolving carbon market system in Nigeria, as well as across the African continent. It also discusses the carbon tax and trading system as integral components of the carbon credit framework and underscores the compelling business rationale for carbon credits as a strategic tool for sustainable development.
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