The challenges currently posed by climate change pale in significance compared with what might come. Governments and businesses need to begin to see climate change as a defining issue for financial stability. While climate change creates risk, it also creates warming opportunities that can be harnessed.

Introduction

Climate change and global warming have been front-burner issues since the turn of the new millennium. News around raising water levels, extinction of species, monsoons leading to flash floods, etc., have all dominated the headlines. Yet, amongst these are new budding and warming economic opportunities to be harnessed.

What is Climate Change?

Climate change according to the United Nations Framework Convention on Climate Change (“UNFCCC”), is a change of climate that is attributed directly or indirectly to human activities that alter the composition of the global atmosphere and which is in addition to natural climate variability[,] observed over comparable time periods. According to the Nigerian Climate Reports 490, climate change is any long-term change in the statistics of weather over durations ranging from decades to millions of years.

Impact of Climate Change on the Environment

Around the globe, seasons are shifting, temperatures are increasing, and sea levels are rising. Climate change affects the whole world though the poorest people, who contribute least to these changes, suffer the most. The Germany Advisory Council on Climate Change noted that climate change is a threat already having substantial impact on humans and natural ecosystem both in developed and developing countries but at varying degree. Some of the impacts are:

  1. Deaths and diseases: Already a study by the World Health Organization shows that climate change is the cause of 150,000 deaths every year. Heavy rainfall caused by changing global temperatures carry terrestrial micro-biological agents into drinking water sources which eventually lead to outbreak of cryptosporidiosis, giardiasis, amoebiasis, typhoid, and other infections.
  2. Rise in temperatures: The over-accumulation of greenhouse gases in the atmosphere could result in an unprecedented atmospheric warming at a global scale to such an extent that human beings and other living things will not be able to tolerate..
  3. Access to water and water sources: A United Nations report predicts that access to water may be the single biggest cause of conflict and war in Africa in the next 25 years. Such wars are most likely to be in countries where rivers or lakes are shared by more than one country.

It is estimated that between 75 million and 250 million people in Africa may be exposed to increased stress like scarcity of water, environmental stress and food security stress, due to climate change by 2022. Gas flaring also contributes to climate change, which hasgas-flaring guardian.ngenormous implications for countries like Nigeria. The burning of fossil fuels, emission of carbon dioxide, and other greenhouse gases – being products of industrialization and globalisation, have led to warming up the global system. This has led to some scientific problems. It affects human health, for instance it has led to deficiency in human immune system, the skin and eyes. Just as it does to humans, it also affects the animals. There is also the problem of acid rain. Climate change is not merely an environmental, scientific, or economic issue; it has become a humanitarian issue too. The effects of climate change will most likely have a major impact on population movement and settlement, whether within countries or across borders.

Impact of Climate Change on the Nigerian Economy

  1. Climate change can lead to notable reduction in agricultural productivity as a result of rising water levels in some areas and drought in other areas. Floods during planting seasons will reduce eventual produce. Also agricultural manpower will be affected by the rise in mortality rate and morbidity.
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    image courtesy climatechange.gov.ng

  2. The effects of climate change may impact dams and hydropower plants – which is a major source of electricity for the country. This should be a concern for energy security.
  3. Many other sectors like the transportation, tourism, and manufacturing sectors are all being affected which ultimately affects the Nigerian economy and its Gross Domestic Product (“GDP”). As per studies conducted by United Kingdom’s Department for International Development (DFID), it concluded that climate change will cost Nigeria between 6 and 30 per cent of its GDP by 2050 worth between $100billion and $460billion.

Climate Change Legislation

In Nigeria, the extant legislation relating to climate change and environmental protection – National Environmental Standards and Regulations Enforcement Agency Act (NESREA Act) – came in to force in 2007. Section 7 of the NESREA Act vests the regulator with the mandate of enforcing compliance with the provisions of international conventions, protocols, treaties and international agreements on the environment.  The NESREA Act is also concerned with the enforcement of the guidelines and legislations on sustainable management and conservation of the ecosystem, biodiversity, and the development of Nigeria’s natural resources.

There is currently a Climate Change Commission Bill before the National Assembly which seeks to address salient issues connected with climate change and provide the institutional and legal framework for climate change governance in the country. It is to provide appropriate policies and institutional structures to combat ecological and environmental problems in Nigeria when passed into law. It is the legal document Nigeria needs to ensure commitment to international agreements on climate change. The draft bill makes provision for the implementation of the rules, institutions and procedures governing the national and international regimes on climate change as outlined in the UNFCC, Kyoto Protocol and Marrakesh Accords, which have all been ratified by Nigeria but are yet to be domesticated. The Bill will also by implication cover Nigeria’s commitment under COP21.

Warming Economic Opportunities

The world has seen an increased appetite for eco-friendly products and services. The consequence of the threats posed by climate change is that any solutions that safeguards the environment, minimizes waste and pollution, and stimulates reuse and recycling have become enormous business opportunities.

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In the financial services sector, concerns about climate change are rapidly altering the way companies and investors consider risk and opportunity. Lenders have the opportunity to launch innovation-driven leasing and lending products to accelerate the widespread adoption of energy efficiency and renewable power initiatives, ushering in a global transition to a low-carbon economy.

Banks should take every opportunity to finance, underwrite, and invest in new products and services. Providing clients with investment capital, new services, and expertise are all areas in which new business opportunities thrive.

Conclusion

The challenges currently posed by climate change pale in significance compared with what might come. Governments and businesses need to begin to see climate change as a defining issue for financial stability. While climate change creates risk, it also creates warming opportunities that must be harnessed.

As an African proverb says, ‘The best time to plant a tree was twenty years ago. The second best time is now’.

Oghale Enuku is a lawyer with an LLM in commercial and maritime law. He researches on emerging areas of law. 

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