Discussion Papers

July 7, 2017

Climate Policy and Finance: Designing an Effective Carbon Pricing System for Nigeria’s Oil and Gas Sector

Carbon
pricing has been recognized not only as the most efficient economic policy
instruments to internalize the social cost of emissions, but also as a major
tool to generate public revenues that can be used to offset the potential
adverse distributional effects of climate policy. However, in many developing
countries, there is a widespread reluctance to commit to climate policy,
largely due to financial constraints, a lack of public support, and concern over
its regressive effects.This paper makes recommendations
towards the design of an effective carbon pricing
system that not only discourages air pollution but also encourages the gradual
uptake of climate-friendly technologies by the private sector in Nigerias oil
and gas sector, while supporting public investment in sustainable
infrastructures and projects that offset the distributional effect of the
climate policy.

Download Label
March 13, 2018 - 4:00 am
application/pdf
421.05 kB
v.1.7 (stable)
Read →

Carbon pricing has been recognized not only as the most efficient economic policy instruments to internalize the social cost of emissions, but also as a major tool to generate public revenues that can be used to offset the potential adverse distributional effects of climate policy. However, in many developing countries, there is a widespread reluctance to commit to climate policy, largely due to financial constraints, a lack of public support, and concern over its regressive effects.This paper makes recommendations towards the design of an effective carbon pricing system that not only discourages air pollution but also encourages the gradual uptake of climate-friendly technologies by the private sector in Nigeria’s oil and gas sector, while supporting public investment in sustainable infrastructures and projects that offset the distributional effect of the climate policy.




Related

 

Nigeria Economic Update (Issue 51)

Recently released data by the National Bureau of Statistics (NBS) shows that there was significant increase in Nigerias total merchandise trade for 2016Q3. Basically, the total merchandise trade increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil exports increased by 31 percent to N1, 943 billion, while non-oil exports increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria recorded yet another trade deficit of N104 billion, indicating continuous higher imports relative to exports. Overall, though there is improvement in the performance of non-oil sector, however, this is insufficient to effectively complement the loss in oil trade sustained since the beginning of oil price crash. This suggests that diversification into non-oil sector may not be able to rescue the economy in the short term. However, while the diversification efforts should be sustained, eliminating hurdles in oil production may be instrumental to higher exports, especially as oil price increase is gaining momentum.