Nigeria shouldn’t have joined the race to Net Zero
Part 1: Context-setting
Why are countries making Net Zero pledges?
Through the landmark 2015 Paris Agreement, all countries committed to limiting average global temperature rise to “well-below 2°C” above pre-industrial levels (widely considered as a tipping point for catastrophic climate change based on scientific evidence), and preferably to limit that warming to 1.5°C. The agreement underlined the need for net zero by requiring its signatories to balance their greenhouse gas emissions with removals out of the atmosphere in the second half of this century. Every country was to submit a nationally determined contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC) which detailed how it would help to deliver this ambition within its borders. Nigeria’s NDC pledged to unconditionally decrease its annual GHG emissions by 20% (relative to a business-as-usual scenario where no decarbonisation action is taken) by 2030, and by 45% if sufficient international support in the form of financing, technology transfer, and capacity building is received.
Analyses by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA), as well as a host of academic researchers, showed that the first round of NDCs made by countries, when aggregated, fell significantly short of delivering net zero globally. Additionally, the IPCC’s special report, Global Warming of 1.5°C, found that global GHG emissions would have to reach net zero by 2050, and become net-negative thereafter, for the Paris Agreement target to be met. With these findings and the increased pressure from citizens to accelerate climate action, many countries committed to delivering net zero by 2050.
What is Nigeria’s Net Zero pledge?
At the 26th Conference of the Parties to the UNFCCC, known as COP26, President Buhari committed Nigeria to delivering net zero by 2060. This followed a trend of similar pledges by developing countries in the run-up to the COP, most notably India which set a net zero target for 2070. India is the third largest GHG emitter globally and is still decades away from its peak of economic growth and energy demand, so PM Narendra Modi’s announcement came as a [welcome] surprise to the international community — rumours on the ground in Glasgow suggested that there was significant resistance to a net-zero pledge from within the Indian delegation which made the commitment even more unexpected. That developing countries are following their more developed counterparts in making net zero pledges is evidence of the increasing consensus that climate change mitigation needs to be greatly accelerated, but also that the mix of pressure and persuasion — often in the form of investment contingent on progressive climate action— from advanced economies, principally the UK (which currently holds the presidency of the COP), EU and US, has worked.
I had thought that Nigeria, as well as other countries in the Global South, would resist this pressure given their negligible contributions to historical GHG emissions and the limited understanding of what net zero would mean for countries that have vastly underdeveloped economies and energy systems. So I was curious about what factors, be they economic or political, influenced the Nigerian government’s decision to make such a commitment.
What informed Nigeria’s Net Zero commitment?
On November 5, at the SDG7 Pavilion in Glasgow, the Nigerian government presented its first ever integrated resource and energy transition plan, which detailed how the country planned to deliver climate change mitigation within its borders. This plan recommended that net zero by 2060 was achievable for Nigeria, and I presume, was the evidence supporting President Buhari’s announcement. The plan was prepared for the Federal Ministry of Environment by the management consulting firm McKinsey & Co. in collaboration with Sustainable Energy for All (SEforALL) and other local organisations.
The plan assessed how key sectors of the economy would need to transition under three emissions pathways : 1) a business-as-usual (BAU) scenario where no decarbonisation action is taken, 2) an NDC-guided scenario which reflected Nigeria’s current NDC commitments and incorporated current national programs, and 3) a Net Zero 2050 scenario (NZE) where Nigeria aligns itself with the global emissions pathway needed to deliver the Paris Agreement. The ‘McKinsey Decabonisation Scenario Explorer’ was cited as the source of the analysis, however I was unable to find this tool online. The Global Energy Perspective published by McKinsey indicates that the firm has a suite of analytical tools/models that it uses to develop pathways for energy and industrial sectors both nationally and globally. Although, it wasn't stated, I can only assume that the Decarbonisation Scenario Explorer is part of these tools that were used to develop possible energy transition pathways for Nigeria.
Part 2: Deep-dive and critique
1. The analytical tools used are not accessible
The use of a model or analytical tool that is not widely-accessible and/or peer-reviewed limits our ability to critique the underlying assumptions and assess whether they are suitable to the context that they are modelling.
Decarbonisation strategies are often prepared using energy system models (ESMs), which are essentially mathematical models that can guide decision-making on the design and operation of an energy system by illustrating different strategies to meet future demands and environmental targets. ESMs can be designed to meet such targets whilst optimising (maximising/minimising) factors that may be: economic (energy price, net present value, total system cost, annualised cost and profit), operational (power plant load factors, ramp-up and ramp-down duration) or environmental (e.g., annual greenhouse gas emissions, carbon intensity). A set of constraints is included to reflect real-world factors such as energy demand; technology costs, efficiencies, supply potential, operational flexibility, and job creation potential; resource availability; policies such as carbon prices — and how they will evolve over time.
ESMs can be programmed to find an optimal system design with perfect or myopic foresight. Perfect foresight assumes that all relevant information over the time horizon modelled is known (e.g. we know what solar will cost in 2050), whereas myopic foresight assumes that information is only known for a portion of the time horizon modelled (e.g. costs only known until 2030). The myopic approach is often implemented to show how short-term decision-making can affect policy or investment choices. [If interested in the breadth of possibilities for energy models, see here, and for the implications of different foresight approaches, see here.]
Evidently, these models are data-intensive and computationally-complex because a wide range of design features and model inputs — and thus results — are possible. Only with more clarity on McKinsey’s modelling tools can we ascertain if the right approach to thinking about decarbonisation has been pursued. For example, it may be the case that the pathway modelled focused on driving down emissions as quickly as possible at minimal cost, with little consideration of the optimal pathway for job creation or utilising local resources.
2. The inequity of a net zero emissions pathway
As seen in Fig. 2, delivering the NDC would require virtually no change in our current annual GHG emissions by 2050. According to the plan, emissions must fall slightly from 179 to 177 megatonnes of CO2 equivalent per year over the next four decades. Essentially, economic planning decisions have to be taken to ensure that whatever population and economic growth occurs in this time period will do so in a manner that will not add to our emissions levels. The NZE, which is significantly more ambitious, allows for a limited increase in emissions until 2025 but requires steeper reductions in our annual emissions thereafter, until they reach zero by mid-century. Unlike in advanced economies, many developing countries aren’t so much attempting an energy transition — because they don’t have established energy and industrial systems to transition from — but attempting to create a new, low-carbon model of development that hasn’t been trialled elsewhere. Should this model fail to realise the levels of economic growth fuelled by coal, oil and natural gas, the effects will likely be borne solely by these poorer countries.
Given the negligible contribution of poor countries such as Nigeria to the greenhouse gas emissions that have led to climate change, and their lower levels of development, why should the same climate change mitigation strategy (i.e. reaching net zero by 2050) be applied to them?
Furthermore, whether current and planned infrastructure including new gas-fired power plants, refineries and industrial facilities are accounted for in these projections is unclear, but I have a hunch that they are not and if they were, they would take us far above this emissions trajectory. I’m not suggesting that these projects be abandoned. Instead, I want to highlight how unhelpful it is to build emissions/country scenarios that don’t consider realities on ground. They just create false hope.
3. The pace of technological and behavioural change needed to deliver Net Zero is out-of-touch with economic and political realities
According to the plan presented (Fig. 2), delivering Nigeria’s current NDC requires strong gas uptake across the economy, including 80% of cars being powered by compressed natural gas (CNG) and 50% of the population using liquefied petroleum gas (LPG) for cooking by 2050. This is already a steep challenge given the limited CNG infrastructure available and the prevalent use of firewood for cooking, especially in rural areas where gas distribution infrastructure does not exist.
The more ambitious NZE would require full electrification of the economy by 2050, including the installation of 250 GW of new power generation capacity (more than 90% of which are from renewable energy sources), conversion of 80% of the car fleet to electric vehicles, and adoption of clean cooking solutions (biogas or electric-based) by 80% of the population.
In the plan, gas use for power would need to increase to meet rising electricity demand until 2030, after which it will be increasingly displaced by solar until there is no power-to-gas by 2050. 42GW of centralised (utility-scale, on-grid) generation is needed by 2030, 14GW of which is provided by gas-fired power plants (Fig. 4). This begs the question: why would anyone invest in these many gas generation assets if they will be stranded or heavily underutilised after 9 years? Additionally, 5 GW of solar generation capacity needs to be built every year for the next 40 years (~200 GW). Now this is not an impossible feat; China built ~250 GW in a decade… but I’ll leave it to the reader to assess if Nigeria can muster up to a quarter of the economic organisation and investment that China harnessed into its solar industry. To perhaps shape your assessment, I have included a timeline of on-grid power generation capacity additions in Nigeria from the 1960s to date.
Fig. 6 provides a clearer picture of how gas production needs to evolve under a NZE pathway. In the short-term to 2030, consumption would rise by 32% but then by 2050, it would fall by 48% relative to current production levels. This is at odds with government rhetoric, and the National Gas Policy (2017) which aims to mainstream gas use across several sectors of the economy, particularly in the power sector where utilising domestic natural gas resources is viewed as a means to guarantee long-term energy security. Whilst gas use needs to fall in NZE, there is a positive picture for job creation. It is expected that transitioning to a carbon-neutral economy could create up to 840,000 jobs by 2050 (28,000 per year on average), mainly from the deployment of decentralised solar solutions and clean cooking stove distributions in the power and building sectors.
Industry emissions (primarily from cement and ammonia production) need to decrease by ~97%, despite a 100% growth of the sector. This can purportedly be achieved through a “100% shift zero-emissions fuels” but further information on which fuels isn’t provided. For reference, industrial decarbonisation is expected to be achieved in advanced economies through the electrification of heat, use of hydrogen or biomass as a fuel or feedstock, deployment carbon capture and storage (CCS) on facilities, and other innovation in materials and chemical processes — all of which are either non-existent or minimally-deployed in Nigeria presently. The largest absolute reduction in emissions would need to occur in the buildings sector, where all cooking needs to become biogas-based or electric.
4. The investment needs are significantly higher than what has been achieved in the relevant sectors historically
Finally, and perhaps most importantly, how much will delivering net-zero cost? To evaluate the incremental cost of decarbonisation, the analysis first estimated the total cost of the expansion of energy and industrial processes in the BAU scenario, i.e. when no climate action is taken. This estimated that $1.5 trillion in investment is needed by 2050 in a BAU scenario. Going further to meet net-zero would require an additional $410 billion (see Fig. 6). Essentially, pursuing a net-zero emissions pathway comes at a $1.9 trillion price tag. It is predicted that $5–6 billion per year of public funding would be needed as part of this (Fig. 5).
The largest investment needs are in the power sector: $270 billion for additional power generation (which would lead to $120 billion in OPEX savings from more renewables deployment as opposed to natural gas use), and $135 billion for the expansion transmission and distribution infrastructure. This is unsurprising as the backbone of almost every country’s energy transition plan is the near-total electrification of energy end-use, and widespread availability of zero-carbon electricity. However, the scale of investment numbers seem unfathomable because of Nigeria’s very limited success in attracting investment into the power sector despite the privatisation of the generation and distribution segments of the value chain in 2013.
5. There appears to have been no consideration of the time needed to establish a positive enabling environment for Net Zero plans
The panel presenting this plan discussed the need for public, donor and private financing to realise these efforts, with an emphasis on utilising local currency financing. Notably absent was any mention of the enabling policies, regulation and institutions needed to encourage investment, and the time/effort that is often required to put them in place. Countries that are embarking on aggressive decarbonisation pathways have long laid the foundation through public funding for research, development and demonstration of new technologies, environmental regulations that allow for the monitoring and assessment of polluting activities from residential to industrial scales, education campaigns, etc. With what is likely to be a huge time lag not considered, I can't help but feel like this plan is out of touch with reality.
Given that the analysis has focused on delivering net-zero by 2050, why did Nigeria commit to a 2060 target? In summary, a buffer of 10 years was included to account for delays in technology adoption (particularly of electric vehicles and clean cooking stoves), and not the enabling environment issues I mentioned previously.
Part 3: Conclusion
Clearly much of this energy transition plan hinges on massive investment in low-carbon energy technologies, technological and behavioural change, and rapid build-out of technologies that have never been deployed in Nigeria. With a fair amount of confidence, I can say that this modelling exercise hasn’t tried to temper the underlying assumptions with historical precedents, or even the pace of change in countries that are further ahead on the decarbonisation journey, to determine what is realistic, especially in the short-term when current financial and political constraints are likely to persist. I appreciate that climate change necessitates action and we will hopefully see accelerated timelines for systemic change but we cannot deny that change will be more difficult in contexts with great economic and sociopolitical complexities such as Nigeria. In pro-climate academic and policy circles, so many unrealistic model assumptions are allowed to slide under the pretext of being “optimistic”. Nigeria must temper its optimism to avoid being trapped by its commitments. This net-zero target will be included in global energy models & used to estimate what needs to be done elsewhere. Overcommitting is lifting the burden on those who can pursue more aggressive mitigation immediately. Even worse, this plan could be used to dictate the type of funding that is offered to the country, which may be at odds with local understanding of what is most beneficial for overall welfare.
This critique should not be read as a call to abandon climate action in Nigeria because climate change is already threatening lives and livelihoods here and we have a vested interest in limiting its effects. Instead, it is a plea to be cautious in how we chart our future in this new carbon-constrained paradigm. We must get on the path to decarbonisation with as much vigour as we can muster, but we must also recognise our limitations and create realistic pathways that prioritise the nation’s development. We cannot succumb to an international political atmosphere that is thriving off feel-good net-zero pledges, with little understanding of what it means for our economy.