Innovative Growth and Climate: A Policy Brief for Nigeria’s Sustainable Future

Curated by Clean Technology Hub

Written by Elijah Idrah (October 2024)

Summary

Innovation is Nigeria’s gateway to sustainable growth amidst economic, energy, and climate challenges. While innovation is expected to play a major role in decarbonization, the development and diffusion of low-carbon technologies are too slow in most sectors and countries to stabilize the climate. Past studies suggest that research on innovation has not sufficiently engaged with three important topics: i) blending behavioral change with technological innovation; ii) the socio-technical drivers of accelerated low-carbon transitions, and iii) the role of digital technologies as new venues of solutions to challenges in addressing climate change. The nexus of climate change and innovation calls for different disciplines and coevolutionary views, as opposed to a traditional disciplinary-focused approach.

Utilizing, indigenous solutions like cleaner fuels — such as Compressed Natural Gas (CNG) — are pivotal to the country’s energy transition. Public-private partnerships can expedite this shift, while sustainable resource management, reducing gas flaring, will maximize the use of natural capital. Additionally, the nexus of climate change and innovation underscores the importance of building climate-resilient infrastructure and enhancing adaptive capacity to protect lives and livelihoods.

Globally, emerging countries find themselves at a crossroads, dealing with the challenge of balancing between economic growth and environmental responsibility. This delicate equilibrium is not only a desirable outcome; it is also required for long-term growth. The key to realizing this potential is innovation, a vital link between economic growth and environmental sustainability.

Innovation is more than simply cutting-edge technology; it is a fusion of international perspectives and indigenous expertise. Developing countries can create strategies that are relevant to their peculiar circumstances. This transformational approach has the potential to turn environmental issues into opportunities, Stimulating economic growth while protecting essential ecosystems.

1. Introduction

Development requires energy. Without sufficient energy availability, no developing human civilization can hope to attain economic sustainability. Almost all facets of social and economic activities require energy. A significant barrier to achieving the poverty, gender, and health objectives of the United Nations Millennium Development Objectives and the Plan of Implementation of the World Summit on Sustainable Development is that two billion people globally lack access to modern forms of energy, and an additional two billion suffer from inadequate supplies. Furthermore, the primary source of greenhouse gas emissions responsible for global warming is the generation of energy through the burning of fossil fuels. One of the fundamental challenges in the 21st century is the provision of energy that is essential for development while simultaneously minimizing environmental and climate hazards.

Nigeria, Africa’s most populous nation and a major crude oil producer, faces the dual challenge of mitigating the devastating effects of climate change while ensuring energy security for its growing population. The country’s heavy reliance on fossil fuels, particularly oil and diesel, has contributed to environmental degradation, air pollution, and economic vulnerabilities tied to fluctuating global oil prices.

As Nigeria endeavors to navigate the delicate balance between economic development, energy security, and environmental sustainability, the convergence of innovation and climate change mitigation becomes paramount. Innovation is expected to play a major role in enabling national and subnational decarbonization processes. Recent advancements present both the private and public sectors with different technological approaches ranging from low or non-carbon solutions to mitigate sources of greenhouse gas (GHG) emissions to carbon capture and storage advances aimed at addressing the impacts of global warming. Yet, the field of innovation is avant-garde, and its broad range of approaches, including technology and innovation management and innovation policy, has acknowledged that, in addition to technological progress, addressing global challenges through innovation also involves organizational, social, and economic changes.

2. Nigeria’s Sustainable Energy Potential

The energy crisis that has engulfed Nigeria for almost two decades, has been enormous and has largely contributed to the incidence of poverty by paralyzing industrial and commercial activities during this period. The Council for Renewable Energy of Nigeria estimates that power outages brought about a loss of 126 billion naira (US$ 984.38 million) annually.

Many indigenous researchers, have looked into the availability of renewable energy resources in Nigeria with a view to establishing their viability in the country.

The average amount of sunshine hours all over the country is estimated to be about 6.5 h. This gives an average annual solar energy intensity of 1,934.5 kWh/m2/year; thus, over the course of a year, an average of 6,372,613 PJ/year (approximately 1,770 TW h/year) of solar energy falls on the entire land area of Nigeria. This is about 120,000 times the total annual average electrical energy generated by the Power Holding Company of Nigeria (PHCN). With a 10% conservative conversion efficiency, the available solar energy resource is about 23 times the Energy Commission of Nigeria’s (ECN) projection of the total final energy demand for Nigeria in the year 2030. A 10-year wind data analysis from 1979 to 1988, considering the surface and upper winds as well as the maximum gusts, demonstrates Nigeria’s potential for wind power generation as well. Ngala et al. performed a statistical analysis of the wind energy potential in Maiduguri, Borno State, and further points to the fact that Nigeria is blessed with a vast opportunity for harvesting wind for electricity production. This is particularly at the core northern states, the mountainous parts of the central and eastern states, and also the offshore areas, where wind is abundantly available throughout the year. The issue then is for the country to look at ways of harnessing resources towards the harvesting of wind energy and through solar energy.

Another area for innovation is that of climate adaptation and natural capital management. This is particularly critical as mortality from climate-induced temperature rise alone is predicted to cause a 3.2% global decrease in GDP by the end of the century. This figure rises to 8% without income growth or adaptation investments. Raising individual incomes is fueled by innovation and planning for climate hazards is necessary to reduce future costs of climate change. Moreover, climate hazards and vulnerabilities fall unequally across populations.

To achieve this equilibrium, climate adaptation and natural capital management are essential. Not only must innovations reduce emissions, but they must shield businesses and households from the effects of climate change as they develop.

The nation stands at a pivotal moment, poised to harness its rich natural resources to drive a transition towards cleaner energy sources while addressing the pressing challenges of climate change. The natural gas-based fuel known as CNG, offers a compelling alternative. It is a greener fuel alternative that emits significantly lower levels of greenhouse gasses and air pollutants compared to petrol and diesel, making it a cleaner fuel option. Moreover, CNG is abundant in Nigeria, with vast reserves spread across the country.

Three facts make achieving sustainable growth in developing countries such as Nigeria a global necessity.

1. Developing countries have a pressing need for economic growth to raise living standards.
2. Developing countries bear the greatest burden from climate change.
3. Developing countries are where future emissions are forecasted to grow most rapidly.

Since 2008, economics research began to rapidly undertake measurement and assessment of global and local costs of climate change. Short-run costs are well documented in the literature, including changes to GDP, mortality, productivity and crop yields,. At the household level, climate shocks can reduce individuals’ ability to accrue and maintain assets — including human capital. As people move across the arc of development, they shift from unproductive self-employment in subsistence-type firms to specialized productive employment in large firms. This movement generates both spectacular improvements in living standards and greater environmental externalities.

It is argued that innovations technological, organizational, social and political now allow us to better balance the need for growth with the need to protect the natural environment. As these innovations take hold and diffuse in diverse areas such as clean energy, clean transportation, natural resource management, and clean manufacturing, it becomes possible to envision a future where developing countries can continue to grow without further worsening the health of the planet or their citizens.

Developing new low-emissions technologies is a first step. Then the entire economy from markets and regulation to taxation, redistribution, and international trade needs to be reshaped.

3. Short Term Policies

Harnessing innovation in Clean Energy Transition includes the following measures;

1. Public Awareness: Raising public awareness about the importance of climate action and sustainable practices is paramount. And NGOs can play a vital role in educating and mobilizing communities.
2. Promoting Indigenous Technological Solutions Nigeria’s energy transition should begin first with a transitioning to low-emission technologies, placing emphasis on our natural capital. Building from this, we would then aim for Net Zero-emission. This presents an opportunity to foster domestic innovation. Government support for research and development initiatives aimed at optimizing CNG production, distribution, and utilization will spur technological advancements and enhance energy efficiency.
3. Encouraging Public-Private Partnership: Collaboration between government agencies, academia, and private sector stakeholders is essential for scaling up clean energy innovations. Collaborative efforts among governments, businesses, and NGOs are pivotal for scaling climate solutions, incentivizing viable R&D programs and collaborating with industry to commercialize R&D output. This would facilitate knowledge transfer, investment mobilization, and the adoption of sustainable practices across the energy value chain. We need to cultivate a robust innovation ecosystem that fosters research and development in clean technologies, sustainable agriculture, and circular economy practices that can accelerate the adoption of climate solutions.
4. Climate Finance: Broadening access to climate finance mechanisms and green funding sources is vital to supporting sustainable projects and initiatives in the country. Fossil fuel subsidies could be directed towards green technologies. For others, it will be important to mobilize the agreed climate finance of $100 billion for climate action in developing nations.
5. Skilled Workforce: Establishing a skilled workforce in fields like renewable energy, sustainable agriculture, and environmental management is crucial for transitioning to a green economy. We need to see investment in education and training programs.

4. Managing Cleaner Natural Capital

A nation’s natural capital is its riches, this dictates its economic standing. Globally, vulnerable people rely on natural capital for work, wages, wealth, and livelihoods, which, in turn, impacts their standards of living. Natural resource values can be used to develop policies for sustainable use. Each country has priorities for economic growth that are strongly influenced by the amount and variety of its natural resources, which is one of the main tenets of the UN’s sustainable development goals. All resource-rich countries have aligned their present and future development strategies with this approach to reinforce the causes of continuous advancement and the elimination of poverty. In order to ensure that Nigeria’s natural capital is utilized sustainably, the following actions must be taken;

1. Sustainable Resource Management: Nigeria’s vast natural capital, including its abundant reserves of natural gas, must be managed sustainably to minimize environmental degradation and maximize long-term socio-economic benefits. Adopting best practices in resource extraction, such as flaring reduction and carbon capture utilization and storage (CCUS), will mitigate greenhouse gas emissions while optimizing resource utilization.
2. Ecosystem Conservation and Restoration: Protecting and restoring Nigeria’s ecosystems, including forests, wetlands, and coastal areas, is critical for climate resilience and biodiversity conservation. Integrating ecosystem-based approaches into development planning, such as reforestation initiatives and mangrove conservation, will enhance natural capital resilience and ecosystem services provision.

5. Climate Adaptation and Resilience

Nigeria’s climate is predicted to undergo increasing fluctuations in temperature, precipitation, storms, and sea levels over the twenty-first century. If these climate-related issues are not resolved, scarce resources like water and land may become even scarcer. As Nigeria works out how to adapt, it must take into account the possibility that climate change could exacerbate conflict. The fundamental causal processes described below might be used as a starting point for creating workable adaptations that stop climate change.

1. Investing in Climate-Resilient Infrastructure: As Nigeria faces increasing climate risks, investing in climate-resilient infrastructure is paramount to safeguarding lives, livelihoods, and economic assets. The variability of climate shocks affects the poorest populations disproportionately from the negative impacts. Temperature rise could increase mortality by 17% in places like Accra in Ghana. Incorporating climate risk assessments and adaptation measures into infrastructure planning and development projects will enhance resilience to extreme weather events and changing climatic conditions.
2. Building Adaptive Capacity: Strengthening institutional capacity and community resilience is essential for effective climate adaptation. Investing in climate education and awareness programs, enhancing early warning systems, and facilitating community-based adaptation initiatives will empower local stakeholders to cope with climate-related challenges and uncertainties.

6. Conclusion

Nigeria’s pursuit of sustainable development hinges on its ability to harness innovation, manage natural capital responsibly, and adapt to the impacts of climate change. By prioritizing domestic technological solutions, promoting clean energy transition, and investing in climate resilience, Nigeria can achieve a harmonious balance between economic growth and environmental stewardship. Nigeria can draw valuable lessons from countries like India and Iran, which have successfully implemented large-scale CNG programs. India’s CNG program, initiated in the 1990s, has led to a significant reduction in air pollution in major cities and created a thriving CNG industry. Iran boasts the world’s largest CNG vehicle fleet and extensive refueling infrastructure, due to a combination of government subsidies, mandates, and public awareness campaigns. As such, Nigeria will be able to meet its climate goals more quickly as a result using its natural capital thereby preventing environmental degradation, funding environmentally friendly infrastructure, and improving public transportation systems that can reduce vehicle-related greenhouse gas emissions.

Therefore, in pursuing initiatives to reduce greenhouse gas emissions and improve air quality, the long-term impact of the widespread adoption of CNG in Nigeria could prove to be transformative.

This would contribute to mitigating climate change and protecting public health. The economic benefits, including lower fuel costs and job creation, can boost economic growth and improve livelihoods. This can serve as a bridge to a more sustainable energy future by complementing the growth of other renewable energy sources. The challenges presented by climate change and the need for sustainable energy solutions are undeniable. Compressed Natural Gas being the cleanest source of energy within Nigeria’s gas sector offers a viable pathway to address these challenges, offering environmental, economic, and social benefits. Implementing a comprehensive strategy that includes supportive government policies, investment in infrastructure, and public awareness campaigns, can help Nigeria leverage its natural resources to combat climate change and drive economic growth, thereby creating a more sustainable energy future for its citizens. The time to act is now.

The recommendations outlined in this policy brief provide a roadmap for policymakers, stakeholders, and the broader society to collaboratively advance Nigeria’s sustainable development agenda in the face of evolving global challenges.