Nigeria’s approval of a National Carbon Market/Carbon Investment Framework marks a turning point in the country’s climate and development trajectory. It is a long-awaited signal that the federal government is ready to unlock carbon finance as a legitimate engine for growth, resilience, and sustainability.
But if we are honest, the true battleground for climate action has never been Abuja, it is the 36 states and 774 local governments where emissions are produced, forests are cleared, waste is dumped, and communities either thrive or struggle under the pressures of climate change. This new carbon investment framework will remain an elegant federal document unless sub-national governments seize the moment and create the policies, institutions, and safeguards required to translate national ambition into local impact.
This is the part Nigeria often gets wrong: we celebrate federal approval, but fail to build the state-level systems that make implementation possible. The climate crisis – and the opportunity of carbon finance, demands that we change this pattern.
A New Era of Carbon Finance – If We Earn It
The federal endorsement of a national carbon framework opens the door to billions of dollars in potential carbon revenue. Properly managed, it could finance adaptation projects, restore degraded ecosystems, electrify transport, modernize agriculture, and support clean energy expansion across the country.
Yet carbon markets operate on credibility, not intention. Emission reductions must be measurable, verifiable, additional, and anchored in sound governance. No investor will commit to state-level projects where land tenure is uncertain, MRV systems are weak, revenue-sharing is opaque, or political instability threatens long-term integrity.
Simply put: states that act now will win; states that hesitate will watch opportunities move elsewhere.
Why Sub-Nationals Must Lead: Climate Impacts Are Local, and So Are Solutions
Nigeria’s Climate Change Act (2021) was designed to guide national climate governance, but its success depends entirely on domestication at the sub-national level.
States control the very sectors that define our carbon footprint and resilience capacity:
• Land-use and forestry
• Agriculture and food systems
• Urban planning and building codes
• Waste management
• Transport systems
• Local energy access
• Community development
Without clear state-level policies, these sectors remain unmanaged and incompatible with carbon finance requirements.
A carbon market cannot function on federal authority alone. It needs state legislation, state MRV systems, state safeguards, and state institutions to ensure every credit issued from Nigerian soil is trustworthy, high-integrity, and fairly governed.
The Most Urgent Step: Sub-National Climate Policies and Climate Action Plans
Every state must now adopt a streamlined State Climate Policy and a State Climate Action Plan that reflect the ambitions of the national Act but respond to local realities. This is not bureaucratic formality – it is the backbone of project quality and investor confidence.
Such policies should:
• Establish a State Climate Unit with a clear mandate and budget.
• Define sectoral priorities – e.g., waste-to-energy, e-mobility, afforestation, regenerative agriculture, mangrove restoration, solar mini-grids, and clean cooking.
• Mandate proper MRV systems and link them to the national registry.
• Create a State Climate Fund with transparent revenue-sharing rules so communities directly benefit.
• Require Free, Prior and Informed Consent (FPIC) for land-based carbon projects to avoid conflict and build legitimacy.
These are not optional bureaucratic tasks – they are the minimum requirements for states to participate credibly in global carbon markets.
Carbon Revenue Is Not Free Money – It Is Earned Through Integrity
Sub-national governments must avoid the temptation to treat carbon revenue as windfall income. Carbon markets punish shortcuts: poor baselines, weak social safeguards, coerced community consent, and opaque revenue use can all result in project reversal, market rejection, or even blacklisting.
States must design robust governance systems now, not as an afterthought – to avoid repeating the mistakes seen in other developing countries where poorly managed carbon projects collapsed amid scandal.
Integrity is not a slogan; it is the currency of carbon markets.
This Is Also a Development Opportunity – If States Are Strategic
Carbon finance is not just about reducing emissions. It can:
• Create green jobs in forestry, energy, agriculture and waste sectors
• Deliver clean cooking access to millions of households
• Improve soil fertility and agricultural resilience
• Modernize public transport
• Reduce flooding through watershed restoration
• Build renewable energy capacity in rural communities
But none of this will materialize without sub-national planning, technical capacity, and state-level legislation that gives developers and investors confidence.
States like Osun, Lagos, Cross River, Niger, Kaduna and others already taking steps toward climate legislation, MRV systems, or nature-based solutions will find themselves at the forefront of this new economy. Others risk being left behind.
The Way Forward: A Clear Call to Action for Every State Government
1. Pass a State Climate Policy and domesticate the Climate Change Act (2021).
2. Establish a State Climate Unit with professionals, not political placeholders.
3. Develop a State GHG Inventory and carbon project pipeline immediately.
4. Create transparent revenue-sharing rules and a State Climate Fund.
5. Mandate FPIC and strong social & biodiversity safeguards.
6. Build MRV capacity – the credibility of carbon credits depends on it.
7. Launch pilot projects in both nature-based and energy sectors.
This is not abstract theory but practical steps that determine whether states access carbon revenue or remain sidelined.
In Conclusion: Nigeria Has Opened the Door. It Is the States That Must Walk Through It.
The approval of the carbon investment framework is historic but history will judge us on whether Nigeria can turn policy into practice.
If states rise to the moment with seriousness, transparency, and innovation, we could witness one of the largest climate-driven development transformations in Africa.
If they do not, Nigeria will have built a national carbon market in name only – a missed opportunity at a time we cannot afford failure.
The time for decisive sub-national action is now.
Professor Chinwe Obuaku-Igwe, Director-General and Special Envoy of the Governor of Osun State on Climate Change and Renewable Energy,
Osun State Government.
