In 2021, I was overcome by a great yearning to do more work around climate, mostly because of the varying effects of climate change I was witnessing, locally in Nigeria as well as across world. Also, I was at an inflection point as an entrepreneur, and I felt it was the right time to focus on the fight for a healthier planet in addition to my work in agriculture. I felt like it was essential to mitigate climate change impacts in order for the world’s vulnerable farmers to prosper. Since then, I have been focused on building to reduce carbon emissions. One of my biggest learnings on this journey is the critical role of climate finance.
Climate finance refers to all funding for projects and programmes that help to reduce emissions and adapt to the impacts of climate change. This can include funding for renewable energy projects, such as wind or solar power, as well as for programmes that help communities to adapt to changes in weather patterns or sea levels. Climate finance can come from a variety of sources, including governments, international organisations, and private investors.
One important aspect of climate finance is that it is designed to be “additional” to other funding sources. This means that it is intended to provide funding for projects and programmes that would not otherwise have been possible, and that it is intended to support sustainable development.
Carbon credits are a form of climate finance that aim to reduce greenhouse gas emissions and promote sustainable development. They work by allowing companies or countries that produce a lot of emissions to offset their emissions by purchasing carbon credits from other entities that have reduced their emissions below a certain level. These credits represent a certain amount of carbon dioxide or other greenhouse gases that have been removed or avoided from the atmosphere, and they can be bought and sold in carbon markets.
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One example of a carbon credit system is the emissions trading scheme, where a company or country is given a certain amount of emissions allowances, and it can buy or sell these allowances depending on their emissions levels. This creates a financial incentive for companies to reduce their emissions, as they can sell any unused allowances to other companies that are not able to reduce their emissions as much. Another example is carbon offset projects, such as reforestation or clean energy projects, that generates carbon credits by removing or avoiding emissions. These credits can then be purchased by a company or country to offset its own emissions.
It is important to note that carbon credit systems are still evolving and are often controversial as there are concerns that carbon credits may not be effective in achieving actual emissions reductions, and that they may be open to fraud or mismanagement. Additionally, carbon credit systems have been criticised for not being transparent or accountable enough, and for not reaching the people and places that need it most. This is one of my motivations to pioneer efficient, transparent and accountable systems of accessing carbon markets, especially for the smallholder farmers of the world.
President Muhammadu Buhari signed Nigeria’s Climate Change Bill into law on November 18, 2021 with a mandate to achieve low greenhouse gas emission, and green and sustainable growth by providing the framework to set a target to reach net zero between 2050 and 2070. The Act includes provisions to adopt National Climate Change Action Plans in five-year cycles and establishes the National Council on Climate Change in a bid to ensure national emissions are consistent with a carbon budget. This Act has huge implications for private sector and represents remarkable opportunities for innovators and entrepreneurs.
At the recent COP27, President Buhari also reiterated commitment to net zero emissions in line with the Climate Change Act and particularly demanded more from the world, specially developed countries to tackle the effects of climate change in Africa. I was greatly inspired by this and proud of the President for demanding commitments to address challenges. I genuinely believe climate finance is the best way to demonstrate this commitment by funding climate action. This is why I am working across continents to democratise access to carbon markets, and eventually other forms of climate finance using technology.
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