November 8, 2022/United Capital Research
The Conference of Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC) began its 27th annual summit on 6-Nov with Egypt as President, given that it is taking place in Cairo. It is the United Nation’s climate change conference which since 1995 has brought climate change from being a fringe issue to a global priority. Its parties are the 197 nations that agreed to the UNFCCC in 1992. In the runup to COP27, Nigeria’s Department of Climate Change had stated that the Government aims to raise $10.0bn at the convention to fund its Energy Transition Plans. However, international climate summits are complex. It is therefore important to understand what Nigeria is working to achieve in the COP27.
The COP has reached important milestones, most crucially, the Paris agreement (COP21) which was unanimously adopted to keep global warming below 2ºC compared to pre-industrial and continue efforts to limit it to 1.5ºC. It came into effect in 2016, encapsulated in the Marrakesh Action Proclamation, and the Glasgow Climate Pact. The COP has also faced criticism, particularly for its failure to agree “loss and damage” finance for countries that are vulnerable to climate change; high-income nations failed to meet a 2009 pledge to provide $100.0bn in climate finance from 2020 to enable low- and middle-income countries transition away from fossil fuels.
Nigeria’s climate change is evident in the drought and desertification in Northern Nigeria, rise in sea level, flooding and submersion of coastal lands, and more frequent extreme weather events. The country has been the recipient of $65.0bn from the World Bank for climate change adaptation in Jul-22. The UK in Feb-22 also announced plans to provide $13.6mn in investments in renewable energy projects. The country will also be a beneficiary of the African Development Bank’s $12.5bn support and the US’s $12.0bn Emergency Programme for Adaptation and Resilience. However, the government estimates that Nigeria needs $10.0bn p.a. to deliver on its net-zero targets by 2060. It has advocated for debt forgiveness in return for the outstanding payments used to mitigate climate change. We think Nigeria, like every other low-income country will struggle to fulfill their obligations under the climate change agreement unless urgent funding support is provided by wealthier nations.
