When it comes to the climate crisis, the prevailing theme seems to be “A whole lot of talk but not much action”.
One of the problems is that climate change is biased. First, there’s a time bias. The current world leaders will be dead before the actual impacts of climate change hit the world. As the British prime minister Boris Johnson said at COP26, the UN’s climate change conference, “The people who will judge us are children not yet born and their children”. There’s also a location bias. The worst-hit region, Africa, is also a minor contributor. Essentially, the leaders of countries with the biggest parts to play are the least affected.
The countries with the highest contributions of emissions are also the least affected by climate change. Developing countries like Nigeria need access to finance to meet their net zero targets and green bonds are the most popular climate finance mechanisms that developing countries can leverage to raise funds for sustainable development.
However, there can be confusion between investors and issuers of green bonds on what green projects mean. When proceeds from green bonds are used to finance projects that aren’t “green”, issuers could be accused of misleading investors and this is called greenwashing.
Nigeria has raised ₦25.96 billion from green bonds since 2017 but it’s difficult to track whether the proceeds from the bonds have been spent appropriately. It’s important for investors and the development of the Nigerian climate financing market that green bond mechanisms are transparent and compliant with international standards.
The aim of the conference, and all other calls for climate action, is to limit the global average temperature rise this century to 1.5 degrees celsius. For context, temperatures have increased by roughly 1-degree celsius in the past 100 years.
Why 1.5 degrees? Right now, we’re already seeing the effects of climate change, especially in countries like Nigeria. For example, high temperatures in the north and less rainfall have caused reduced crop production, mass displacement of