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The Centre for Climate Change and Development (CCCD) at Alex Ekwueme Federal University, in collaboration with the Overseas Development Institute (ODI) London, is holding an online event to present the key findings from the recent national research on Nigeria’s subsidy reform and its energy transition agenda.

The CCCD and ODI conducted a  research aimed at understanding  the impacts of fuel subsidy reform and its potential near-term consequences.

 The research, which is based on an extensive literature review, economic modelling techniques, and interviews with several leading thinkers in Nigeria, explored the opportunities and challenges associated with subsidy reform in relation to Nigeria’s energy transition agenda.

 It also offers a suite of guides for a politically smart, socially inclusive reform and reallocation of public funds, which in the long term could be the first step to planning towards a just and equitable transition away from fossil fuels.

It would be recalled that in May 2023, President Bola Ahmed Tinubu announced the immediate removal of Nigeria’s petroleum subsidy, leading to dramatic increases in end-user fuel prices.

While there are compelling justifications for subsidy reform, considerable problems exist about the method, consequences, and sustainability of the  reform.

The failure to mitigate the short-term socio-economic effects of subsidy reform would have multi-level consequences across Nigeria’s economy and populations.

It could harm the most vulnerable segments of Nigeria’s population and introduce political risks to the sustainability of reform, as experienced by similar attempts by former governments.

A real or perceived lack of transparency in the sector could also make it difficult to determine the various other ways in which state revenues are being lost, which can further hinder sector reform and cause a range of environmental, social, and economic harms.

The workshop will be held on the 14th of March 2024, 12:00–13:30 WAT, and will be hosted by Dr. Nwajiku-Dahou, Director of the Politics and Governance Programme at Overseas Development Institute, and Professor Chukwumerije Okereke, Director of the Centre for Climate Change and Development at Alex Ekwueme Federal University, Ndufu-Alike, Nigeria (CCCD-AEFUNAI).

Hon. Sam Onuigbo, a member of the governing board and Chairman of the Committee on Climate Change of the North East Development Commission, and Hon. (Eng). Solomon Bulus Maren, National Coordinator of the African Parliamentary Network on Climate Action, are the guests of honour for the event.

Speaking ahead of the event, the Director of the Centre for Climate Change and Development, Prof. Chukwumerije Okereke, said that the research is intandem with the mission of the Centre to collaborate with top-level international partners to undertake high-quality research to generate knowledge that will contribute to climate- resilient and sustainable development of Nigeria and Africa.

Okereke expressed the hope that the Federal government will utilise the findings of the research to reform the fuel subsidy in ways that will be fairer, more progressive and better advance the energy transition objectives of the country.

Professor Chukwumerije Okereke, an internationally recognised professor, has been appointed as the Special Adviser (SA) on Climate Policy and Sustainable Development to the Governor of Enugu State, Barr. Peter N. Mbah.

Prof. Okereke has been appointed to assist the state in designing and executing science-based climate policy, with the goal of contributing to the state’s long-term growth.

The Professor, who was born in Enugu, is an expert in climate governance, environmental policy, and international development. He is regarded as one of Africa’s leading researchers in the fields of climate justice, low-carbon development, and green economic transition.

Prof. Okereke holds a Chair in Global Governance and Public Policy at the prestigious School for Policy Studies, University of Bristol University, UK, and is also the Director of the Centre for Climate Change and Development, Alex Ekwueme Federal University Ndufu-Alike, Nigeria. He is also a visiting Professor at the London School of Economics, and a Senior Academic Visitor at the University of Oxford.

Over the last 20 years, Professor Okereke has maintained an extensive high-impact engagement with national governments, businesses, and NGOs in Africa and led several high-profile international projects on climate change policy, mainstreaming, and green economy transition in Africa.  He led the team that analysed the adaptation components of African NDCs for the African Development Bank (AfDB) under the direction of the bank’s Climate and Green Growth Division. He was the founding Project Manager of the Rwandan Green Growth and Climate Resilience Project, which was the first ever national low-carbon plan in Africa.

Prof. Okereke was the technical leader of the Climate Change Bill Review Committee convened by the former Speaker of the House, Femi Gbajabiamiala, and was responsible for developing several innovative aspects of the Climate Change Act, including the carbon budget and the DG position of the National Council on Climate Change.

Prof. Okereke has led several major national climate change research and policy initiatives, including the Long-Term Low Emission Development Strategy, Nigeria’s Long-Term Vision, and Which Way Nigeria: Citizens Scenario 2060.

Prof. Okereke’s academic merit and international research leadership status are affirmed through his leadership roles in multiple high-profile global Scientist Assessment Projects and networks including as Coordinating Lead Author, of the United Nations Intergovernmental Panel on Climate Change (IPCC) Working Group III Sixth Assessment Report.

Prof. Okereke is an Awardee of the prestigious International Visitor Leadership Programme of the United States Department of States, and he was recently elected Fellow of The World Academy of Sciences for the advancement of science in Developing Countries (UNESCO-TWAS) in recognition of his outstanding contribution to science and its promotion in the developing world.

Prof. Okereke’s academic merit and international research leadership status are demonstrated by his leadership roles in a number of high-profile global Scientist Assessment Projects and networks, including his role as Coordinating Lead Author for the United Nations Intergovernmental Panel on Climate Change (IPCC) Working Group III Sixth Assessment Report. Prof. Okereke has received the prestigious International Visitor Leadership Programme Award from the United States Department of State, and he was recently elected Fellow of The World Academy of Sciences for the Advancement of Science in Developing Countries (UNESCO-TWAS) in recognition of his outstanding contributions to science and its promotion in the developing world.

Prof. Chidiebere Onyia, Secretary to the Governor of Enugu State, who conveyed the appointment letter, stated that “the expectation is that Enugu State will significantly benefit from Prof. Okereke’s expertise and dedication during the tenure of his appointment.”

Onyia adds: “The anticipation is that Enugu State will significantly gain from Professor Okereke’s expertise and dedication during the tenure of his appointment.”

Commenting on the appointment, Prof. Okereke said: “I am very delighted to be contacted by His Excellency to be part of his transformation agenda in Enugu State to raise the climate consciousness of the state and help develop a science-based plan to reduce climate impacts in the state.

“In the spirit of tomorrow is here agenda of the state we have already started the campaign, I just trained 31 young climate leaders in Enugu State in urban greening and air quality measurements and carried out climate education exercises involving over 7,000 children from three public secondary schools in Enugu State and planting of over 100 economic and ornamental trees in strategic locations throughout the city under the International Visitors’ leadership programme (IVLP) impact award given to me by the U.S Department of State Bureau for Education and Cultural Affairs.

“This recognition will spur me to do more for my dear state in the area of climate awareness in keeping with the city’s reputation as a clean, ambient, and family-friendly metropolis.”

The position operates on a pro-bono basis and no salary or benefits are associated with it.

i.  Climate Education is a climate solution. Climate education and communication hold a key solution in increasing the awareness campaign on climate action, especially mainstreaming Climate education into the school curricula and grassroots community programs. It is only through education that students can develop climate solutions. By incorporating climate change and environmental sustainability into the curriculum, we can equip future generations with the tools they need to address the challenges of climate change. The populace needs to be educated on climate impacts, policies and action plans, through consistent awareness, enlightenment, trainings and engagements to drum local support and contextual action for climate solution.

ii.  Climate resilience of agroecosystems and socioeconomic livelihood is strengthened by community initiatives for collective action to improve the surrounding natural resources and ecosystems for a sustainable future. Local communities approach climate adaptation response in a way that uses several traditional knowledge and indigenous solutions. Local adaptation capabilities and resilience against climate change can be increased using methods specific to their environment. Therefore, there is a need to boost subnational efforts to enhance local communities in developing indigenous adaptation solutions and implementing actions to respond to current and future climate change impacts.

iii.  Funding and support need to be directed to areas that are most vulnerable and require urgent action; because by understanding the varying impacts and risks at the subnational level, resources can be allocated more effectively.

iv.  Climate policies should be designed with the local context in mind, involving local communities in the decision-making process foster to a sense of ownership and responsibility towards climate action, to ensure that climate action is practical, achievable, and resonates with the local population. This will increase the likelihood of successful climate policy implementation and sustainability of climate action initiatives.

v.  There is a need to develop and promote climate change vulnerability assessments and adaptation strategies for addressing climate change, mainly as regards local to regional-scale vulnerability assessments and adaptation plans; especially considering the surge in the number and frequency of adaptation practices and initiatives in all of Nigeria’s agroecological zones due to the increasing impacts of climate change.

vi.  There is a need to enhance the ability of decision-makers to understand and plan for environmental change by putting people-centred and gender-sensitive analysis at the centre of climate adaptation. By integrating population data in climate adaptation planning, policymakers can provide a more comprehensive understanding of vulnerability and develop means for resilience.

vii.  There is also the need to develop and implement relevant international and regional frameworks to ensure that all climate adaptation measures to address climate vulnerabilities take into account the specific needs of the locals: farmers, women, children, youth, persons with disabilities and other marginalized groups following relevant human rights and other instruments.

viii.  Addressing climate risks at the subnational level requires better planning and implementation of adaptation measures, including building resilient infrastructure, implementing early warning systems, and developing climate-resilient agriculture and water management practices. There is to need to support community resilience built through climate-smart investments that allow local farmers, women and young people to take a greater role in decision-making over their futures.

ix.  There is a need for coordination and collaboration among various stakeholders at the subnational level. Government bodies, communities, NGOs, and businesses can work together to address climate challenges more effectively. Support and stakeholders engagement programs is key to ensure inclusive participations and shared responsibility of climate action.

x.  State governments should explore local solutions that promote equity and community engagement through inclusive decision-making to reflect communities’ diverse needs, concerns, and aspirations in the face of climate challenges. Subnationals should be seen supporting local communities to identify priority needs and collaboratively plan for climate adaptation, with access to decentralized climate funding.

xi.  State government should establish an Indigenous knowledge research hub and local advisory committee to guide on a system change to accommodate climate vulnerabilities and, in the process, thrive and recover from any eventuality. National action plans must imbibe adaptation actions that are based on and guided by the best available science (funded research) and, as appropriate, traditional knowledge, knowledge of indigenous peoples and local knowledge systems, to integrate adaptation into socioeconomic and environmental policies and actions.

xii.  Bringing up the discourse on subnational involvements will also give credence and voice to the much talked about Locally led adaptation (LLA), which unlocks, supports and leverages the high potential and innovative capabilities of communities to develop and implement solutions. Thus, there is a need for coordinated practices and principles for climate resilience that integrate multiple locally-led adaptation responses, including Indigenous solutions and local knowledge, to ensure climate-proofing and sustainability of agricultural ecosystems.

Timothy Emenike Ogenyi,
Senior Climate Policy Analyst,
Society for Planet and Prosperity (SPP)

In a daring move, Nigeria’s President, His Excellency President Bola Ahmed Tinubu GCFR, declared the immediate abolition of fuel subsidies during his Inaugural Address on May 29, 2023, stating quite simply that “subsidy is gone”. In the coming months, President Tinubu would go on to announce that the money from subsidy payments will be transferred to fund public infrastructure, education, health care, and jobs, among other critical developmental requirements for the country.

While the elimination of subsidies was praised as a key step in advancing Nigeria’s divestment from fossil fuels in the global climate change community, it remained unclear, indeed doubtful, whether this was the motivation for Nigeria’s decision. There is no denying that the decision to establish the Presidential Compressed Natural Gas Initiative (PCNGI)-an initiative aimed at promoting the widespread adoption of Compressed Natural Gas (CNG)-powered vehicles in Nigeria’s transportation system-will have an impact on the country’s greenhouse gas emissions and, as a result, will aid Nigeria’s net zero and decarbonisation efforts. However, much more is required to make the fuel subsidy programme serve Nigeria’s climate goals.

In thinking more holistically and systematically about how the elimination of petroleum import subsidies might assist in driving Nigeria’s climate action and ultimately position the country for long-term growth in line with global trends, one start in the right path is to set aside a specific percentage of subsidy savings for a special ring-finance fund that can be used to fund investments and projects in climate adaption, renewables, and climate-smart innovation. This is the path to toe.

It is therefore our recommendation that a minimum of 20% of the savings from the subsidy removal regime be dedicated especially to climate-related infrastructure and investments. The fund can be deposited in the Climate Change Fund, which was established by the Climate Change Act, and administered as grants, subventions, allocations for infrastructure projects, subsidies for renewable energy and climate-smart agriculture, and so on. Some of the money can also be used as catalytic funding to leverage bigger investments in renewable energy investment from international public and private sector sources. Going by projected savings, this will free up about N16bn annually for climate finance that can be used to drive sustainable development of Nigeria.

Parties to the international climate agreement at COP28 in Dubai, which the president and numerous ministers attended, committed to collaborate to triple the world’s installed renewable energy generation capacity to at least 11,000 GW by 2030. Despite Nigeria’s significant solar potential, with daily irradiation equivalent to more than a million tonnes of oil, far exceeding its oil and gas outputs, solar accounts for only 0.2% of installed capacity, making its contribution to the country’s energy mix almost insignificant.

According to a study conducted by Boston Consulting Group and All On (a Shell-funded impact investment company), the off-grid solar market in Nigeria had a compound annual growth rate of 22% between 2018 and 2022, making it one of the fastest growing in Africa during the same period. However, uptake is still hampered by high upfront costs, with only 1.25% of Nigerian households installing the system. According to the same study, installing solar in 30% of Nigerian households by 2030 would save 5 million metric tonnes of CO2, cutting household emissions by 30%. A dedicated fund created from fossil fuel savings can be utilised to invest in the expansion of on-grid and off-grid solar in Nigeria, thereby helping to bridge the energy poverty gap.

This becomes even urgent considering that Nigeria continues to have the world’s biggest unelectrified population, with over 90 million of the country’s 200 million people living off the grid.

A recent Agora policy report finds that climate change is causing increased hunger, poverty, disease burden, migration, conflict, and insecurity in Nigeria. It is damaging infrastructure, altering Nigeria’s coastlines, fuelling desertification, causing water scarcity, facilitating erosion, and resulting in revenue losses for states and the national government, with the cumulative total economic cost of climate change to Nigeria estimated to be up to USD100 billion by 2050. Climate change might reduce agricultural productivity by 10 to 25 percent by 2080. For some places in the country’s north, rainfed agriculture yields could fall by up to 50%. Increased warming trends will also make root crop and vegetable storage difficult for farmers who do not have access to refrigerators, exacerbating the already high degree of postharvest loss. Climate change is therefore arguably the biggest economic development challenge facing Nigeria.

President Tinubu will make a bold announcement by allocating 20% of the country’s subsidy savings to the Climate Change Fund, which can then be used to compel higher commitments from the international community. Such promises may take the shape of a strong demand for the debt-for-climate programme, additional money for adaptation, loss and damage, renewables, and a reform of the global finance infrastructure to reduce the risk of investment for potential green firms.

The 28th Session of the Conference of the Parties (COP28) to the UN Framework Convention on Climate Change (UNFCCC) took a significant step by unveiling a bold Global Stocktake (GST) draft that underscored the imperative for nations worldwide to steer away from the use of fossil fuels; marking a fundamental departure from the status quo, along with a call to massively scale up renewables and energy efficiency this decade.

COP28’s outcomes reflect the good, the bad, and the ugly of the COP process in particular, and multilateralism more broadly. Let us explore how, beginning with the good outcomes.

Top on the list of “the good” is that despite the blooper by President Sultan Al-Jaber over his claim that there is “no science” behind calls for a phase out of fossil fuels, he was able to secure a landmark agreement for the world to transition away from fossil fuels. This was, in a way, an enormous feat for a COP that was brimming with over 2,000 oil and gas lobbyists, and a welcome win for climate defenders.

Although the language is not as strong as the “phaseout” many wanted, the GST text succinctly called for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.”

The United Arab Emirates’ (UAE) establishment of the groundbreaking ALTÉRRA investment fund for transformative climate partnerships to finance the much required energy transition, in emerging markets and developing economies (EMDEs) in the Global South was a good announcement in the right direction. The ALTÉRRA fund, with a $30 billion commitment from the UAE, positions itself as the world’s leading private entity for climate change action.

The fund, possessing inaugural launch partners such as finance juggernauts BlackRock, Brookfield and TPG, aims to mobilize $250 billion by 2030 to help Least Developed Countries (LDCs) and Small Island Developing States (SIDS) finance climate solutions.

It is also good that the GST text emphasized the link between climate action and development and explicitly reaffirms that climate action should be undertaken in the context of sustainable development and poverty eradication. It also reasserted important concepts like international equity, the rights to clean air, and the concept of common but differentiated responsibility. The text, in many places, underscored the importance of global cooperation and solidarity to effectively tackle climate change.

The commitment to triple renewable energy capacity globally and doubling energy efficiency by 2030 presents “a good” outcome and indeed one of the biggest wins from Dubai. Outlining the immediate need for a rapid transition, more than 125 countries committed to the tripling of renewable energy, working together to boost clean energy capacity to at least 11,000 GW by 2030, and an average annual rate of energy efficiency of 4.1%. In a way, for Africa, I see this commitment as more important than the headline statements on phase down on fossil fuel because the immediate need of the majority of the people is access to energy.

Last year, the International Energy Agency’s (IEA) Net Zero Roadmap released a report showing scaling up renewable energy as an important way to attain global climate goals. The IEA report projected that a speedy rollout of significant clean energy technologies will lead to a decline in the demand for coal, oil and natural gas this decade, even without any new climate policies. Hence the best route to phasing out fossil fuel is to supply people with clean energy.

However, this is where it gets tricky. Developing countries and emerging markets face myriad problems such as high initial costs of finance for the acquisition and installation of renewable energy technologies. Therefore, they require extensive international support, which is essential for amplifying investments in renewable energy, a key solution to addressing the challenges faced by developing nations in the Global South.

There is a need to scale up renewable energy financing especially for Africa, which in 2022 only received 2% of global investments in clean energy. Sub-Saharan Africa, where 600 million people live without access to electricity, has more than 1,000 times as much renewable potential as energy demand, according to the International Renewable Energy Agency (IRENA).

Hence the fact that the COP text included a general mention on tripling renewable energy generation without making specific commitments on the increase in allocation to African and other developing countries is a major source of concern. This oversight by the parties at COP28 in the GST must be swiftly addressed at COP29, laying the groundwork for renewable energy sources development to be easily accessible by developing countries who are most severely affected by accelerating climate change.

In addition, 123 countries signed the Global Renewable Energy and Energy Efficiency Pledge at COP28 to triple global renewable capacity and double global energy efficiency improvements by 2030 and expand financial support for scaling renewable energy and efficiency programmes in emerging markets and developing economies. An essential highlight of the pledge’s text is that it acknowledges the role of “transitional fuels” in preserving energy security temporarily.

Although gas as a transitional fuel is climate-friendly and not ideal, in developing countries, it remains a healthier and less polluting alternative for home cooking and heating compared to burning wood or other biomass. This is particularly impactful for developing countries like Nigeria whose Energy Transition Plan (ETP) aims to utilise gas as transition fuel. Regardless, it is important to establish a timeline for the phased transition away from transitional fuels.

Unfortunately, China and India, two of the world’s leading countries in the uptake of renewable energy, refused to sign the pledge. The contention for both countries centred around the initiative’s calls for phasing down of coal and “ending the continued investment in unabated new coal-fired power plants.” It is well-known that while China has embarked on a significant expansion in renewables in the past few years and is projected to account for more than 80% of the global solar manufacturing capacity through to 2026, but it continues to burn more coal every year than the rest of the world combined.

Similarly, while India is the world’s third-largest producer of renewable energy, with 40% of its installed energy capacity coming from non-fossil fuel sources, coal is an important part of India’s energy needs, and the country depends on coal for 73% of its energy needs. In fact, India is working to add 17 gigawatts of coal-based power generation capacity to meet a record increase in power demand.

The problem is that while big countries with technology and domestic finance are able to fend off international pressure to limit their expansion of fossil fuel generation, poor countries in Africa who have much stronger moral, energy-security and climate-related arguments for using transition fuel in the medium term are made to suffer from a carbon–embargo imposed by foreign countries and investors.

The COP text and outcomes show the gap between proclamations and action when it comes to tackling climate change and putting money where their mouths are. We have known for a long time now that the pledges made by countries will not get us to where we want to be by 2030. Most countries are not on course to fulfilling their pledges. Yet, over and over again, countries gather annually for climate conferences, make commitments only to fail to act on them to assist poor countries at the frontline of the climate crisis to build climate resilience.

Developed and high-income countries most responsible for global warming had committed to raising $100 billion every year by 2020 to fund climate action in developing countries. However, climate finance provided by developed countries for climate action to developing countries only reached $89.6 billion in 2021, according to the Organisation for Economic Co-operation and Development’s (OECD) sixth assessment of progress and $100 billion goal.

Although the final text emphasised that finance alongside capacity building and technology transfer are critical enablers of climate action and urged developed country parties to fully deliver on the $100 billion per year goal through 2025, there was no specifics on whether or how to make up the shortfall. There is an undeniable need to go beyond words and act urgently on climate change and to do so in the context of sustainable development.

It’s been revealed that adapting to the climate crisis could cost developing countries anywhere from $160-$340 billion annually by 2030. That number could increase to as much as $565 billion by 2050 if climate change accelerates, according to a UN Environment Programme’s (UNEP) 2022 Adaptation Gap Report.

It is equally distressing that climate finance, especially for adaptation, has been decreasing instead of growing at a time of worsening climate crisis. And while the operationalisation of the Loss and Damage Fund is a welcome development, failure to scale climate finance for mitigation and adaptation in poor countries represents a big letdown for the climate equity and justice to which countries pay lip service.

Currently, the UN Environment Programme (UNEP) approximates that the adaptation finance requirements for developing countries are up to 18 times greater than the present influx of public finance from developed countries.

This brings us to the ugly in the outcomes of COP28 – the hypocrisy of the West who are either expanding or at least not reducing their fossil fuel exploitation in their jurisdictions but seem to have no qualms in asking developing countries with severe energy poverty to commit to phase out fossil fuels. In the United States, President Joe Biden’s administration has continued to approve more permits for oil and gas exploration and extraction in its first two years – over 6,900 permits – a number higher than Trump’s in the same period.

China has been developing nine new oil and gas fields, including the significant discovery of a major oil field in the Bohai Sea last year. Notably, twenty of the world’s largest fossil fuel companies including BP, Chevron, Saudi Aramco, Shell, and TotalEnergies – are projected to collectively invest over $930 billion by 2030 in expanding oil and gas production.

COP28 ended with some noteworthy strides in the right direction. Since the agreement and pledges are not legally binding, all eyes, as always, will be on how far all parties take their pledges for an intentional, actionable, sustainable and impactful approach to climate change.

Parties must align national climate plans, with ambitious timelines for emissions reductions and backing them with tangible implementation strategies before the next Nationally Determined Contributions (NDCs) submission ahead of COP30 in Brazil, with a timeframe for implementation till 2035.

They must translate the UAE Consensus, a collective response to the GST into their updated NDCs and developmental domestic legislation and policies, including increasing renewables, fossil-free transport systems and decreasing production and consumption of fossil fuels. Azerbaijan’s COP29 needs to provide breakthroughs on prickly and fundamental questions about finance for a just transition.

Developed countries should refrain from self-deception and perform genuine efforts for a globally inclusive and systematic energy transition. It is crucial to address the equity gap by boosting financial and technological assistance to developing countries, allowing them to partake in the clean energy revolution. This requires innovative financing methods, technology transfer initiatives, and capacity-building programmes to empower all nations toward a shared and sustainable future.

By Professor Chukwumerije Okereke

Okereke is the Director of the Centre for Climate Change and Development at Alex Ekwueme Federal University Ndufu-Alike, a Professor of Global Governance and Public Policy at the University of Bristol and a Visiting Professor at the London School of Economics, UK