$2.5 billion carbon market: Nigeria positions as UNDP sets 2030 target for Africa

The United Nations Development Programme(UNDP) says that Africa will need $250 billion annually to achieve climate objectives by 2030.
This is even as President Bola Ahmed Tinubu’s administration seeks to minimize Nigeria’s carbon emissions, thereby enhancing the country’s entry into the lucrative $2.5 billion carbon market.
The financial requirement for the continent was disclosed in UNDP’s new Africa Green Business and Financing Report published on its website on Tuesday, May 21, 2024.
The report states that there is a clear need to capitalize on the vast opportunities that are available across the African region.
It explains that African countries hold the key to global climate action due to their youthful workforce and vast renewable energy potential.
The report states, “While the needs at individual country levels vary widely, research suggests that in aggregate Africa needs approximately US$250 billion annually to implement its Nationally Determined Contributions (NDCs) and achieve its climate objectives by 2030.
“Yet, the volume of capital flowing into climate finance is only 10 percent of that requirement, with private capital making up only a small portion.”
According to the report, while the economic and climate challenges faced by Africa are complex and interconnected, the continent’s rich abundance of natural resources makes it well-positioned to serve as a unique business and investment opportunity for relevant investors.
Besides, the report observes that many African economies are already taking steps to increase economic diversification and enhance participation in value-added manufacturing and services crucial to the green transition.
The report notes, “Sustainable development practices, for instance, are taking place in mineral value chains in the Democratic Republic of the Congo and Zambia.
“There is also a promising shift underway towards increased regional economic cooperation, with initiatives such as the African Continental free Trade Area (AfCfTA) offering a new model for intra-African trade and development.
“This shift can facilitate innumerable opportunities for green businesses to exploit and enter new, regional markets.”
The report states that while the continent is emitting just four per cent of greenhouse gas emissions, it is extremely vulnerable to the impacts of climate change, resulting in huge financial losses to the tune of billions.
It says, however, that there is a $100 billion annual investment opportunity for investors owing to Africa’s vast mineral deposits.
It states, “Extreme weather – including droughts, Cyclones and heatwaves – is increasing infrequency and intensity, alongside trends of urbanization, population growth and weak conservation enforcement.
“Ecosystem Damage and biodiversity loss is now having major negative impacts on livelihoods, causing $7-15 billion in yearly losses (projected to reach $40 billion by 2030) .
“Studies show that developing countries energy transition and shift to climate positive resilient infrastructure represents a $100 billion annual investment opportunity.”

Source: Nairametrics

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