BUSINESS DAY
Climate change could cost Nigeria up to trillions in stranded assets especially if government fails to take critical measures now ahead of imminent global actions. This is according to an Agora policy report on “Climate Change and Socio-Economic Development in Nigeria” launched on Wednesday in Abuja.
Asset stranding is the process of collapsing expectations of future profits from invested capital (the asset) as a result of disruptive policy and/or technological change.
Already, many countries have outlined different timelines of between 2030 and 2050 to begin their phase out of fossil fuel usage. Norway has already commenced the process, while China is due to start any time in the near future.
The report notes that as the world attempts to achieve net-zero carbon emissions and penalise climate-unfriendly investments and activities, vast quantities of recoverable fossil fuels will have to remain underground in order to stabilise the global climate and energy-intensive equipment will have to be retired at a quicker pace in favour of less carbon-intensive ones.
“With this transition, therefore, many assets will become stranded,” the reports emphasizes.
“It is hard to accurately calculate the economic cost of climate change in Nigeria but available estimates suggest a cumulative of up to $100 billion by 2020 and $460 billion by 2050.”
In 2006, the World Bank assumed that between 2-10% of Nigeria’s Gross Domestic Investment and about 40% of official development assistance would be sensitive to climate change.
Despite these consequences, there are concerns that government is not paying significant attention to climate change and it’s consequences.
The report further notes scientific evidence which indicates that Nigeria is experiencing rapid climate change with figures suggesting the situation will get worse with time.
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