The Relevance of the Kyoto Protocol to

the Nigerian Petroleum Sector

By Victor Onyegbado
Associate Counsel
AKABOGU & ASSOCIATE

Abstract
The linkages between the extant United Nations arrangement for curtailing global warming and the
Petroleum Sector in Nigeria has continued to stimulate intellectual enquiry from industry practitioners,
policy makers and environmental rights activists by equal measure. For one, the Protocol targets copious
global consumption of fossil fuels; the export of which is the mainstay of Nigeria’s economy. This paper
explores these subtle linkages and suggests that Nigeria’s apparent dilemma situation as a Kyoto State party
can be turned around through strategic and proactive exploitation of the protocol’s more immediately
beneficial provisions.
[Pick the date]
Table of Content

CHAPTER ONE: WHAT IS THE KYOTO PROTOCOL

1.1 The Emergence of the Kyoto Protocol

1.2 Overview of key provisions of the Kyoto Protocol

CHAPTER TWO: THE KYOTO PROTOCOL, NIGERIAN PETROLEUM SECTOR AND CLIMATE CHANGE

2.1 OVERVIEW OF NIGERIA’S PETROLEUM SECTOR

2.2 Nigerian Environmental Laws Relating To the Petroleum Sector

2.3 Legal Status of the Kyoto Protocol in Nigeria’s Jurisprudence

CHAPTER THREE: THE EFFECTS OF THE KYOTO PROTOCOL ON NIGERIA’S PETROLEUM SECTOR

3.1 Short Term Effects

3.3 Long Term Effects

CHAPTER FOUR: FUTURE PROSPECTS OF THE KYOTO PROTOCOL AND NIGERIA’S PETROLEUM SECTOR

4.1 Future of the Kyoto Protocol

4.2 Global Action Plan on the Kyoto Protocol

4.3 CDM in Focus

4.4 Negotiations for a Post 2012 Climate Change Regime

4.5 Conclusion
2
Chapter One
What is the Kyoto Protocol

1.1 Global Efforts at tackling climate change and the Emergence of the Kyoto
Protocol

Climate change is the latest challenge to sustainable human development1. Climate change has been defined
as a change of climate which is attributed directly or indirectly to human activity that alters the composition
of the global atmosphere and which is in addition to natural climate variability observed over comparable
time periods.2

The development of the United Nations (U.N.) climate change3 regime has followed a pattern familiar in
international environmental lawmaking4. First a framework convention is adopted, establishing the basic
system of governance for a given issue area. Then, regulatory requirements are negotiated in a protocol to
the convention.5 The ozone regime followed this pattern, starting with the adoption of the Vienna
Convention for the Protection of the Ozone Layer in 1985, and continuing with the adoption of the Montreal
Protocol on Substances that Deplete the Ozone Layer in 1987. In similar fashion, the climate change regime
began with the negotiation of the 1992 United Nations Framework Convention on Climate Change

1
National Adaptation Strategy and Plan of Action on Climate Change for Nigeria (NASPA-CCN) prepared by the Building
Nigeria’s Response to Climate Change (BNRCC) Project for the Federal Ministry of Environment.
http://nigeriaclimatechange.org/NASPA-CCN%20BNRCC%20Edition%20FINAL.pdf
2
Article 1 of the United Nations Framework Convention on Climate Change (UNFCCC), 1992
3
Hydropower generation is the energy source most likely to be affected by climate change. It is sensitive to the amount,
timing, and geographical pattern of precipitation, as well as temperature.
4
Bodansky, Daniel. "W[h]ither the Kyoto Protocol? Durban and Beyond." Policy Brief, Harvard Project on Climate
Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School, August 2011.

3
(UNFCCC), followed five years later by the Kyoto Protocol, which elaborates specific regulatory
requirements to limit greenhouse gas emissions.

Between the signings of the UN Convention and the Kyoto Protocol, two Conferences of the Parties were
held (referred to as “COP6-1” and “COP-2”). At the first Conference, held in Berlin in 1995, nations adopted
the Berlin Mandate, a commitment by developed nations to set specific targets and timeframes for reducing
greenhouse gas emissions and to outline explicit policies and measures to meet these targets.

At the second Conference, held a year later in Geneva, Switzerland, nations adopted the Ministerial
Declaration of 1996. This Declaration firmly stated that the science of climate change was compelling, and
that legally binding commitments on greenhouse gas emissions were warranted. The Declaration was a
response to the charge that the science of global climate change was uncertain, and that action
was unwarranted.

The central element of the Kyoto Protocol is the agreement by participating nations to meet specific
greenhouse gas7 emission targets. The Protocol covers the emission of six primary greenhouse gases: carbon
dioxide, methane, nitrous oxide, hydro fluorocarbons, perflurocarbons, and sulfur hexafluoride.

It is important to note that nations do not have the same emission reduction targets under the Protocol.
Instead, different groups of nations have different targets. Canada’s target, for example, is to bring
greenhouse gas emissions to six percent lower than what its emissions were in the year 1990. Most
European countries, by contrast, are obliged to reduce their emissions to eight percent below their
1990 levels.

The Protocol requires each participating nation to achieve its particular emissions targets by the period
2008-2012, with evidence of demonstrable progress by 2005. Countries undergoing the process of
transition to a market economy, such as many Eastern European nations, were accorded some flexibility
under the Protocol in meeting their emission target deadlines.8

5
Daniel Bodansky, The Art and Craft of International Environmental Law, chapter 8 (Harvard University Press, 2009).
6
COP is an acronym which represents Conference of the Parties
7
Article 1 of the UNFCCC defines greenhouse gases as gaseous constituents of the atmosphere, both natural and
anthropogenic, that absorb and re-emit infrared radiation
8
The understanding was that these nations should not sacrifice necessary economic development in order to meet their
Kyoto obligations
4
Following the signing of the Kyoto Protocol in 1997, participating nations held a string of COP meetings in
order to work out the Protocol’s details. In 1998, nations adopted the Buenos Aires Plan of Action, which
established a list of 140 items that necessitated agreement before countries could ratify the Protocol. These
items ranged from working out an enforcement regime to establishing the rules for an emissions-
trading system.

Most of the high-profile issues that remained outstanding were finally resolved in the Bonn Agreements
and the Marrakech Accords, signed at the sixth and seventh Conferences of the Parties (both held in 2001).
Under these agreements, participating members committed to comprehensive schemes governing flexibility
mechanisms under the Protocol, such as the operating rules for emissions trading, emissions “sinks,” the
Clean Development Mechanism, and Joint Implementation Projects. Nations also agreed to a general
framework for enforcing compliance with emissions targets.

In 2007, at the Bali Climate Change Conference, the parties to the UNFCCC established a parallel negotiating
process, involving the other big emitters such as the United States and China, to consider long-term
cooperative action under the Convention, with a goal of reaching a comprehensive outcome addressing
mitigation, adaptation, finance and technology.9

The Bali Conference culminated in the adoption of the Bali Road Map, which consists of a number of
forward-looking decisions that represent the various tracks that are essential to reaching a secure climate
future. The Bali Road Map includes the Bali Action Plan10, which charts the course for a new negotiating
process designed to tackle climate change along with a number of other decisions and resolutions.

At the United Nations Conference on Environment and Development, held in 1992 in Rio de Janeiro, Brazil,
agreement was reached on the Framework Convention on Climate Change (FCCC)11 which established as its
ultimate objective12 the “stabilization of greenhouse gas13 concentrations in the atmosphere at a level that
would prevent dangerous anthropogenic interference with the climate system.” The objective further
prescribed that such a level should be achieved within a time frame sufficient to allow ecosystems to adapt

9
Bali Action Plan, UNFCCC Dec. 1/CP.13, Dec. 15, 2007, U.N. Doc. FCCC/CP/2007/6/Add.1 (establishing the Ad Hoc Working
Group on Long-Term Cooperative Action under the Convention, or AWG-LCA)
10
The aim of the Bali Action Plan was expected to be completed in 2009
11
This Convention is known as the United Nations Framework Convention on Climate Change (UNFCCC)
12
Article 2 of the Convention
13
The acronym GHG is used to represent Greenhouse Gas
5
naturally to climate change, to ensure that food production is not threatened and to enable economic
development to proceed in a sustainable manner.14

As an interim measure, the UNFCCC imposed a non-binding goal of reducing greenhouse gas emissions by
industrialized countries15 (referred to as Annex I countries16) to their 1990 levels by the year 2000. The
UNFCCC allowed countries flexibility to develop and implement their own domestic policies to achieve their
goals, and provided additional flexibility by allowing Annex I countries to sponsor emissions abatement and
sequestration projects in other countries through joint implementation (a form of project-based emissions
trading).

It was agreed that Annex I countries were to take a leadership role in reducing greenhouse gas emissions.
Implicit in this understanding was the recognition that developed nations had been the primary greenhouse
gas emitters over the last century, and that emission stabilization would be more problematic for non-
developed or developing countries.17

The Protocol’s distinction between developed and developing nations stems from an early recognition that
developed nations had been the leading contributors to increasing greenhouse gas levels over the last
century and, as such, should take the lead in stabilizing the process of global warming. Negotiating parties
further agreed that developing nations should not be required to sacrifice economic development in order
to reduce or stabilize their greenhouse gas emissions – accounting for their exemption from emission
targets. There was, however, the possibility that some developing nations, particularly China and India, may
take on more formal obligations under the Protocol in the future.

The Convention was only a general agreement in principle aimed at stabilizing greenhouse gas emissions.
The Convention did not provide any of the important specifics for action, such as precise emission reduction
targets, a timetable by which nations were to meet their targets, or a penalty system to punish violators.
These issues were to be addressed at subsequent “Conferences of the Parties” (COP), which were regular
meetings that include all of the Protocol’s participating members.

14
Article 2
15
The UNFCCC was initially signed by 161 nations and came into force in January 1994 after being ratified by 50 countries
including the United States. The UNFCCC now has 187 parties which is more than any other international environmental
agreement
16
Annex 1 parties include the developed nations and economies in transition
17
It was believed that emission stabilization could come at the cost of economic development for non-developed and
developing countries, something that was not easily affordable by them.
6
In order to scale up the provision of long-term financing for developing countries, Governments at COP 16 in
Cancun decided to establish a Green Climate Fund. The fund will support projects, programmes, policies and
other activities in developing country Parties using thematic funding windows. A Transitional Committee
selected by Parties to the UNFCCC will design the details of the new fund, which will be designated as an
operating entity of the financial mechanism of the Convention and will be accountable to the COP.

The objective of the Cancun Adaptation Framework is to enhance action on adaptation, including through
international cooperation and coherent consideration of matters relating to adaptation under the UNFCCC.
Ultimately enhanced action on adaptation seeks to reduce vulnerability and build resilience in developing
country Parties, taking into account the urgent and immediate needs of those developing countries that are
particularly vulnerable.

1.2 Overview of key provisions of the Kyoto Protocol

Bodansky18 has identified three key features of the Kyoto Protocol which are noteworthy. Firstly, the
Protocol sharply differentiates between Annex 1 and non-Annex 119 parties.20 The UNFCCC did not create an
absolute distinction between developed and developing countries but elaborated on the general obligations
common to all parties and additional commitments which relate to reporting and financial assistance for
Annex 1 and Annex II21 parties respectively, a “degree of flexibility” for countries, and a procedure by which
the classification of countries could be reconsidered as circumstances change 22. In contrast to the foregoing,
the negotiating mandate for the Kyoto Protocol categorically excluded any new commitments for non-Annex
I countries, operational, operationalizing a comparatively flexible principle in an extremely rigid way.23

18
Supra., "W[h]ither the Kyoto Protocol? Durban and Beyond" at page 2
19
Non-Annex 1 parties can be loosely described as developing countries
20
The UNFCCC refers in article 4.2 to “the developed country Parties and other Parties included in Annex 1” which effectively
creates the possibility that not all Annex 1 parties qualify as “developed”. It is also noteworthy that the term “developing
country” is neither defined in the UNFCCC nor in the Kyoto Protocol. Although developing countries are usually referred to as
non-Annex 1 parties, it is debatable whether indeed, all of the non-Annex 1 countries can be classified as “developing” since
the list includes countries like South Korea, Mexico and Chile, which are now members of the Organization of Economic
Cooperation and Development (OECD).
21
Annex II is a subset of Annex I which comprises of members of the OECD as at 1992 when the UNFCCC was adopted
22
Article 4 of the UNFCCC
23
Berlin Mandate, UNFCCC Dec. 1/CP.1, April 7, 1995, U.N. Doc. FCCC/CP/1995/7/Add.1.
7
Second, because the Kyoto Protocol negotiations focused exclusively on developed country emissions
reductions, the primary axis in the negotiations was between the two main developed country powers, the
United States and the European Union, in the case of the United States with support from Japan, Australia
and other members of the so-called “Umbrella Group”.

Third, the Kyoto Protocol’s regulatory approach was modelled on the Montreal Protocol on Substances that
Deplete the Ozone Layer, adopted ten years earlier. Like the Montreal Protocol, the Kyoto Protocol
establishes legally-binding commitments, consisting of quantitative national performance standards,
defined through a process of “top-down” international negotiations. In contrast, the UNFCCC had elaborated
a bottom-up process requiring countries to develop and report on nationally-defined policies and measures
to mitigate climate change.24

It is important to note that the Kyoto Protocol’s standards consist of quantitative limits25 of national
greenhouse gas emissions. In contrast, the quantitative targets specified in the Montreal Protocol limit
production and consumption (rather than emissions) of ozone-depleting substances.

Another important element of the Kyoto Protocol is its flexibility mechanisms. These enable participating
nations to achieve their emission targets by means other than simply reducing their own national emissions
of greenhouse gases – hence, the term “flexibility mechanisms.” The Protocol provides for three
such mechanisms:

 Clean Development: This mechanism allows developed (or Annex 1) nations to receive emission
credits towards their own emission targets by participating in certain projects in developing (or
Non-annex 1) countries. These Clean Development projects must be approved by members of the
Protocol and must contribute to sustainable development and greenhouse gas emission reductions
in the host developing country.

 Joint Implementation: This mechanism allows Annex 1 nations to receive emission credits towards
their own emission targets by participating in certain projects with other Annex 1 nations. These
Joint Implementation projects must be approved by all nations participating in the project, and must

24
Daniel Bodansky, “The UN Framework Convention on Climate Change: A Commentary”, 18 Yale J. Int’l L. 451, 508 (1993)
25
For the Kyoto Protocol’s first commitment period, which runs for a five year period from 2008 – 2012, European Union
member states are required to reduce their emissions by 8% relative to 1990 levels; Japan by 6% and Russia by 0%.
8
 either reduce greenhouse gas emissions or contribute to enhanced greenhouse gas removal through
emission sinks (i.e. reforestation).

 Emissions Trading: This mechanism allows Annex 1 nations to purchase emission ‘credits’ from
other Annex 1 countries. Some countries will be below the emission targets assigned to them under
the Protocol and, as such, will have spare emission credits. Under the emissions trading system,
other nations may purchase these spare credits and use them towards their own emission targets.

These mechanisms are meant to provide individual countries some flexibility in meeting their particular
emission targets, while still ensuring an overall reduction in greenhouse gas emissions. Under the Clean
Development Mechanism, for example, the Annex 1 nation receives emission credits for reducing
greenhouse gas emission in a developing nation. Hence, while emissions in the Annex 1 nation have in
actuality remained the same, overall global emissions have been reduced.

9
Chapter 2
Nigerian Petroleum Sector and Climate Change

2.1 Overview of Nigeria’s Petroleum Sector

2.1.1 Introduction

It has become somewhat traditional, albeit regrettably so, for text writers and commentators on
the petroleum sector in Nigeria to dwell majorly on upstream operations; and particularly the
crude oil exploration and production component of that sub-sector. In most cases, little mention is
made of the downstream on the one hand, and even more importantly, of the sector’s gas
component on the other hand. Since a major focus of this paper is the Kyoto protocol; an
international arrangement whose main aim is to contain emissions of the main greenhouse gases 26,
we propose to give a fair bit of attention to these oft neglected, but all important, components of
our oil and gas industry. We shall of course also talk about crude oil exploration and production;
but particular regard will be had to how activities and policies relating to them affect climate
change and global warming.

2.1.2 Structure of Nigeria’s Petroleum Sector

Upstream
Ogbeifun27 has remarked that the oil and gas industry in Nigeria comprises mainly of the upstream,
the downstream and service sectors. The upstream sector focuses on mining, exploration,
production and exportation and is dominated by multinational companies. Activities in this sector
have made Nigeria Africa's leading oil producer and sixth largest crude oil exporter in the world.

26
See Article 2 of the United Nations Framework Convention on Climate Change (UNFCC) and the Recital to the Kyoto
protocol 1998
27

10
Crude oil export has also become the mainstay of the country’s economy, pivoting other sectors
and accounting for about 90% of foreign exchange earnings. By some accounts, Nigeria also derives
about 41% of her Gross Domestic Product (GDP), and 88% of the Federal Government collectable
revenue from the crude oil export oil industry28.

Downstream
The downstream sector is involved in refining of crude oil into usable products through distillation,
conversion and other special treatments to arrive at petroleum products and gas. It is also involved
in distribution of products. According to Aigbedion & Iyayi 29, the downstream sector has been
constrained by unenviable state of the refineries, which have been producing at minimal capacities
despite huge expenses incurred on turnaround maintenance of the crisis-ridden refineries. The
transportation and distribution side of the downstream sector has a respectable presence of local
operators. The sector however is characterized by massive importation of refined products and
also the regulation of the pump prices of some products by government through the provision of
consumer subsidies under a scheme called the Petroleum Support Fund (PSF)30. The World Bank
has argued that consumer subsidies on fossil fuels are unhelpful to fight against climate change 31.
This, according to the bank is because funds which can be used to provide sinks for green house
gasses for instance, are utilized for the wasteful consumption of pollutants.

Gas
Nigeria’s proven natural gas reserves are estimated at about 185 TCF which is the World’s 7 th
largest gas reserves. Estimates of Nigeria’s undiscovered gas reserves range from 300–600 TCF.
Nigeria has therefore been described as gas a province with some oil32. In many Nigerian oil fields,

28
Etete, D., "Investment Prospect in the Petroleum Sector", Report on the Second Nigerian Economic Summit,
Ibadan:Spectrum 1995
29
30
The Petroleum Support Fund is Nigeria’s Government Subsidy policy which pays back to importers of specified petroleum
products the deferential between the real market price of the said products and the government fixed pump price. Recent
attempts by the government to jettison the policy sparked nationwide protest.
31
See Fossil Fuel subsidies and Carbon Targets published at http://www.guardian.co.uk/environment/2012/jan/19/fossil-
fuel-subsidies-carbon-target as at 25/03/2012
32
Babalakin O “Investing in Nigeria’s Oil and Gas Industry” published at
http://www.guardian.co.uk/environment/2012/jan/19/fossil-fuel-subsidies-carbon-target as at 25/03/2012

11
large volumes of gas are produced with crude oil when it is brought to the surface. This is
particularly true in the Niger Delta where much of the oil has a high proportion of this ‘associated’
gas33. Owing to the fact that the core of Nigeria’s petroleum infrastructure were built at times when
domestic demand34 for Natural gas was limited, most of the gas produces in Nigeria is burnt off via
tall chimneys; a practices commonly referred to as flaring . It is worthy of note that flaring of
associated gas is no longer accepted industry practice yet it persists in Nigeria; earning the country
the stigma of being the world’s highest in flaring of the gas associated with petroleum production35.
Associated Petroleum Gas flaring has been identified as a contributor to the menace of Global
warming since Methane which is a major component of Associated Petroleum Gas is one of the
Green House Gasses regulated under the Kyoto protocol. Nigeria has however launched an
ambitious Gas Master-plan which seeks to put Nigeria’ gas endowments to optimal use by
providing a framework for Gas Pricing, Gas Assignment of Gas Supply Obligations to Producers and
provision of Gas Infrastructure based on a blueprint which has been developed.36

2.2 Relevant Legislations on Environmental protection in the Petroleum Sector

2.2.0 The role of legislation in inducing responsible attitudes and behaviors towards the environment
cannot be overlooked. Legislation serves as an effective instrument for environmental protection, planning,
pollution, prevention and control. The following provides a summary of Nigerian environmental protection
legislations which have a bearing on the Petroleum Sector.

2.2.1 CONSTITUTION OF THE FEDERAL REPUBLIC OF NIGERIA (1999). The constitution recognizes the
importance of improving and protecting the environment and makes provision for same. Relevant sections
are:

 Section 20 makes it an objective of the Nigerian State to improve and protect the air, land, water,
forest and wildlife of Nigeria.

34
And indeed global demand
35
Garba I. Malumfashi PHASE-OUT OF GAS FLARING IN NIGERIA BY 2008: THE PROSPECTS OF A MULTI-WIN PROJECT
(CEPMLP) Dundee 2007
36
See generally The Nigeria Gas Master Plan
12
  Section 12 establishes, though impliedly, that international treaties (including environmental
treaties) ratified by the National Assembly should be implemented as law in Nigeria.
 Section 33 and 34 guarantee fundamental human rights to life and human dignity. It has been
argued that these rights are linked to the need for a healthy and safe environment to give these
rights effect.

2.2.2NATIONAL ENVIRONMENTAL STANDARDS AND REGULATION ENFORCEMENT AGENCY (NESREA)

ACT 2007
This Act is administered by the Ministry of Environment. It replaced the Federal Environmental
Protection Agency (FEPA) Act and is the embodiment of laws and regulations focused on the
protection and sustainable development of the environment and its natural resources. The following
sections are worth noting:-

 Section 7 provides authority to ensure compliance with environmental laws, local and international,
on environmental sanitation and pollution prevention and control through monitory and regulatory
measures.
 Section 8 (1)(K) empowers the Agency to make and review regulations on air and water quality,
effluent limitations, control of harmful substances and other forms of environmental pollution and
sanitation.
 Section 27 prohibits, without lawful authority, the discharge of hazardous substances into the
environment. This offence is punishable under this section, with a fine not exceeding, N1, 000,000
(One Million Naira) and an imprisonment term of 5 years. In the case of a company, there is an
additional fine of N50, 000, for every day the offence persists.

2.2.3 PETROLEUM Act Cap P10 LFN 2004

The Petroleum Act and its Regulations remain the primary legislation on oil and gas activities in Nigeria. It
promotes public safety and environmental protection. The following sections are relevant:
 Section 9 (1) (b) provides authority to make regulations on operations for the prevention of air and
water pollution.

Some of the regulations made under the petroleum act include;

PETROLEUM DRILLING AND PRODUCTION REGULATIONS:

 Section 23 and 27 prohibits, without lawful permission, the cut down of trees in forest reserves.

13
PETROLEUM REFINING REGULATION
 Section 43 (3) requires the Manager of a refinery to take measures to prevent and control pollution
of the environment.
 Section 45 makes any contravention punishable with a fine of N100 or an imprisonment term of six
months.

MINERAL OIL SAFETY REGULATIONS AND CRUDE OIL TRANSPORTATION AND SHIPMENT
REGULATIONS
These Regulations prescribe precautions to be taken in the production, loading, transfer and storage of
petroleum products to prevent environmental pollution.

2.2.4 PETROLEUM PRODUCTS AND DISTRIBUTION ACT, CAP P12, LFN 2004
Under this Act, the offence of sabotage which could result in environmental pollution is punishable with a
death sentence or an imprisonment term not exceeding 21 years.
2.2.5 ENVIRONMENTAL IMPACT ASSESSMENT (EIA) ACT CAP E12, LFN 2004. An Environmental Impact
Assessment (EIA) is an assessment of the potential impacts whether positive or negative, of a proposed
project on the natural environment. The E.I.A Act deals with the considerations of environmental impact in
respect of public and private projects. Sections relevant to environmental emergency prevention under the
EIA include:
 Section 2 (1) requires an assessment of public or private projects likely to have a significant
(negative) impact on the environment.
 Section 2 (4) requires an application in writing to the Agency before embarking on projects for their
environmental assessment to determine approval.
 Section 13 establishes cases where an EIA is required and
 Section 60 creates a legal liability for contravention of any provision.

2.2.6 HARMFUL WASTE (SPECIAL CRIMINAL PROVISIONS) ACT CAP H1, LFN 2004 The Harmful Waste
Act prohibits, without lawful authority, the carrying, dumping or depositing of harmful waste in the air, land
or waters of Nigeria. The following sections are notable:
 Section 6 provides for a punishment of life imprisonment for offenders as well as the forfeiture of
land or anything used to commit the offence.
 Section 7 makes provision for the punishment accordingly, of any conniving, consenting or
negligent officer where the offence is committed by a company.

14
  Section 12 defines the civil liability of any offender. He would be liable to persons who have
suffered injury as a result of his offending act.

2.2.7 HYDROCARBON OIL REFINERIES ACT, CAP H5, LFN 2004. The Hydrocarbon Oil Refineries Act is
concerned with the licensing and control of refining activities. Relevant sections include the following:
 Section 1 prohibits any unlicensed refining of hydrocarbon oils in places other than a refinery.
 Section 9 requires refineries to maintain pollution prevention facilities.
2.2.8 ASSOCIATED GAS RE-INJECTION ACT, CAP 20, LFN 2004 The Associated Gas Re-Injection Act deals
with the gas flaring activities of oil and gas companies in Nigeria. The following sections are relevant to
pollution prevention:
 Section 3 (1) prohibits, without lawful permission, any oil and gas company from flaring gas in
Nigeria.
 Section 4 stipulates the penalty for breach of permit conditions.

2.2.9 THE FEDERAL NATIONAL PARKS ACT, CAP N65, LFN 2004
The National Parks Act is concerned with the establishment of protected areas used for resource
conservation, water catchments protection, wildlife conservation and maintenance of the national
ecosystem balance.

NIGER-DELTA DEVELOPMENT COMMISSION (NDDC) ACT, CAP N68, LFN 2004 The Niger-Delta
Development Commission Act is concerned with using allocated funds to tackle ecological problems arising
from the exploration of oil minerals in the Delta.
Section 7 (1) (b) empowers the Commission to plan and to implement projects for the sustainable
development of the Delta in the field of transportation, health, agriculture, fisheries, urban and housing
development, etc. The Commission, under this Act, has a duty to liaise with oil and gas companies and
advice stakeholders on the control of oil spillages, gas flaring and other related forms of environmental
pollution.

2.2.10 CRIMINAL CODE: As archaic as the Criminal Code is, it contains provisions for the prevention of
public health hazards and for environmental protection. Hence: Sections 245-248 deal with offences
ranging from water fouling, to the use of noxious substances.

15
2.3 Legal Status of the Kyoto Protocol in Nigeria’s Jurisprudence

The Nigerian Constitution37, in its Section 12 provides to the effect that all international treaties to which
Nigeria is party must be enacted into local legislations by the National Assembly before such treaties can
have force of Law. The section further provides that where the matters to which a treaty relates are such as
not within the exclusive legislative list38, while the National Assembly may still legislate on such a treaty for
the purpose of implementing it in Nigeria, a majority of Houses of Assemblies in the Federation will have to
ratify same.

The Kyoto protocol has not as been domesticated in line with the provisions of Section 12 of the
Constitution. The effects that this can have on Nigeria’s efforts at ameliorating the menace of climate change
can be far reaching or inconsequential depending on the point of view from which the subject is approached.
Having said this however, the distinction between ratification of international treaties on the one hand and
domestication on the other must be clearly pointed out. This is in other to appreciate Kyoto’s place in our
jurisprudence. According to Egbede 39 ratification is the process by which a State (in this case Nigeria)
establishes in the international plane its consent to be bound by a treaty40, while the implementation (or
domestication) is the process by which a treaty validly entered into by a State is enacted (or domesticated)
as legislation so it can have effect within the domestic plane. Section 12 of the constitution only applies to
the implementation (or domestication) of treaties. This dichotomy of roles with regards to application of
treaties on the Nigerian state was borrowed from England and may be summarized in the words of the Privy
Council in the case Attorney General for Canada v. Attorney General for Ontario41 thus
Within the British Empire there is a well-established rule that the making of a treaty is an
Executive act, while the performance of its obligations, if they entail alteration of the
existing domestic law requires legislative action. Parliament, no doubt, has a
constitutional control over the Executive; but it cannot be disputed that the creation of
the obligations undertaken in treaties and the assent to their form and quality are the
function of the Executive alone. Once they are created, while they bind the State as

37
Constitution of the Federal Republic of Nigeria (CFRN) 1999 Cap C 23 LFN 2004
38 nd
See 2 Schedule to the CFRN 1999
39
Egbede BAKASSI: CRITICAL LOOK AT THE GREEN TREE AGREEMENT
http://www.nigerianlawguru.com/articles/international%20law/BAKASSI,%20A%20CRITICAL%20LOOK%20AT%20THE%20GR
EEN%20TREE%20AGREEMENT.pdf at pg 1
40
Also see Article 1 of the Vienna Convention on the Law of Treaties 1969
41
[1937] AC 326 AT 347-348
16
 against the other contracting parties, Parliament may refuse to perform them and so
leave the State in default.”
With regards to ratification therefore, Nigeria (as represented by the Executive arm of the Federal
Government) has ratified the Kyoto Protocol since 10th December 200442 but there is yet no local enactment
to give the treaty’s provisions teeth on the home front.

Flowing from the above analysis, one may argue that a call for the domestication of the Kyoto protocol in
Nigeria is rather superfluous since Nigeria, not being an Annex 1 state, is not bound to any emissions
mandates. However it is our considered opinion that certain parts of the protocol affords Nigeria some
benefits which require the framework of a local legislation in other to be harnessed. The Clean Development
Mechanism (CDM) initiative of the protocol can afford Nigeria and indeed other African states a viable
means of sourcing foreign direct investment43. Under the scheme, States (or companies in such states) with
emissions limit mandates may buy spare emission credits from their counterparts who have it or fund
emission reduction projects in Non Annex 1 party states.

It is instructive that even though the USA has signed out of the Kyoto Protocol, she has a robust carbon
trading industry much like what is obtainable in the EU. Nigeria may which to adopt this carbon trading
model either singly or in conjunction with some of her regional neighbors. For this purpose therefore the
domestication of the Kyoto protocol or at least so parts of it may be required.

42
Status of Ratification of the Kyoto Protocol published
http://unfccc.int/kyoto_protocol/status_of_ratification/items/2613.php
43
See Article 12 (3) (a) of the Kyoto Protocol
17
Chapter 3
Effects of the Kyoto Protocol on Nigeria’s
Petroleum Sector

Often it is argued that Africa need not care about climate change because in global dimensions
Africa itself produces negligible greenhouse gases. Climate change is primarily caused by the
developed countries, so they should be the ones dealing with it. However, it is the bitter irony of
destiny that Africa contributes least of all the continents to the climate change, but will probably
suffer most from its consequences. According to economists it is a typical case of negative external
effects, an externalisation of costs: A noninvolved party bears the costs of a third party’s actions44.

3.1 Short Term Effects of Climate Change

The effects of the Kyoto Protocol on the Nigerian Petroleum Sector cannot therefore be divorced
from the effects of climate change on that industry in one respect. In this regard it may be argued
that to the extent that the protocol seeks to curb climate change by reducing the consumption of
fossil fuels like oil, gas or carbon, significant economical impacts on the producers or suppliers of
these fuels are very real. Nigeria is the eighth largest oil supplier in the world. The ninth largest
deposits of gas are located here. The Nigerian national economy would be massively affected by a
sustainable reduction of fossil energy consumption. As identified in Chapter two of this paper,
about 88% of the government income, 90-95% of the export earnings and more than 90% of the
foreign exchange revenues evolve from the oil sector. Alive to this fact therefore Ajao45 has opined
that

Nigeria’s energy sector is also vulnerable to the impacts of response measures. Response
measures are measures being taken by the developed countries Parties to the Convention

44
Nnimmo Bassey Climate change in Nigeria is a ticking time bomb J. Soc. Sci., 15(1): 83-93 (2007)
45
Ajao et-al Nigeria and Climate Change: Road to Cop15: Achieving the best outcome for Nigeria FEE Abuja 2009
18
 and the Protocol in their various countries to reduce greenhouse gas (GHG) emissions. A
specific example is the introduction of carbon tax on consumption of petroleum. Since the
source of greenhouse gas emissions, to a very large extent, is the production and
consumption of fossil fuels, both the Convention and the Protocol are largely targeting
carbon dioxide (CO2) emissions and by extension, fossil fuels including oil, gas and coal46.

An example of the negative impact of the Kyoto protocol to Nigeria’s Petroleum Sector it is opined
may be seen in the difficulty that has been experienced

3.2 Long-term Effects of Climate Change

In spite of the above however the long term effects of climate change if not mitigated spell calamity
for the Nigerian Petroleum sector and as such one may argue that Kyoto which seeks to forstall this
is in the industry’s interests. A grim picture painted by the Climate Change Unit of Nigeria’s Federal
Ministry of Environment in its publication Building Nigeria’s Response to Climate Change (BNRCC)
Project47 when it stated that

The economic value of oil and gas investment in Nigeria’s coastal and offshore
areas is in the trillions of US dollars. This investment is at risk from the
negative impacts of climate change, including rising sea levels, heavy storms,
floods, high winds and shoreline erosion. Climate change is also expected to
negatively impact the already limited electrical power supply through impacts
on hydroelectric and thermal generation. Service interruption is also expected
to result from damage to transmission lines and substation equipment
impacted by sea level rise, flash floods, and other extreme weather events.
Climate change impacts resulting in increased fuel-wood scarcity will increase
pressure on the remaining forest resources, resulting in further degradation
of the environment and negative impacts on rural livelihoods.

Following from the above analysis therefore one can conclude that the Kyoto Protocol presents for
the Nigeria n Petroleum Sector a dilemma which it can however wiggle out from through
46
Nigeria and Climate Change:Road to Cop15: Achieving the best outcome for Nigeria
47
Published at http://www.nigeriaclimatechange.org/projectpublications.php
19
diversification. Following the Kyoto-Protocol is a double-edged sword for Nigeria: The probably
positive long term effects on the climate change are opposed to the negative short term effects for
the economic development. Observing the Kyoto-Protocol would reduce the income of the OPEC –
States, amongst them Nigeria... This would be a catastrophe for the Nigerian development plan:
Urgently needed investments in education and infrastructure could at best be done partly which
would have long term negative effects on the development path of the country48.

48
Nnimmo Bassey Climate change in Nigeria is a ticking time bomb J. Soc. Sci., 15(1): 83-93 (2007)
20
Chapter Four
FUTURE PROSPECTS FOR THE KYOTO PROTOCOL
AND NIGERIA’S PETROLEUM SECTOR

4.1 The future of the Kyoto Protocol

Ever since the Kyoto Protocol’s entry into force in 2005, the question of what to do after 2012, when
Kyoto’s first commitment period runs out, has been a central focus of the United Nations climate change
negotiations. Developing countries such as China and India want the Protocol to continue in the present
form, imposing quantitative limits on developed country emissions but not their own. The European
Union might be amenable to a new commitment period under the Protocol, but only as part of “a global
and comprehensive framework engaging all major economies”, including the United States and China.
Meanwhile, some Kyoto parties, such as Japan, Canada, and Russia, want to replace the Kyoto Protocol
with a comprehensive new agreement with commitments by both developed and developing
countries.49

In 2005, the parties to the Kyoto Protocol established an ad hoc working group50 to negotiate further
commitments under the Protocol for the post-2012 period. But since none of the countries with Kyoto
targets are willing to proceed absent parallel action under the UNFCCC to address the emissions of the
other major economies, the working group has made only limited progress to date.51

With little more than a year to go before the end of Kyoto’s first commitment period, it appears likely
that there will be a gap – of indefinite duration – before the establishment of any new legal commitments
limiting greenhouse gas emissions. Even if the Kyoto Protocol parties agreed at the Durban conference52

49
Bodansky, Daniel. "W[h]ither the Kyoto Protocol? Durban and Beyond." Policy Brief, Harvard Project on Climate
Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School, August 2011.
50
This group is referred to as AWG-KP
51
Consideration of Future Commitment periods for Subsequent Periods for Parties Included in Annex 1 of the Convention, KP
Dec. 1/CMP.1, Dec. 9, 2005, U.N. Doc. FCCC/KP/CMP/2005/8/Add.1.
52
Held in Durban, South Africa in 2011
21
 to an amendment establishing a second commitment period – an extremely improbable outcome – there
is virtually no chance that sufficient countries would ratify the a

4.2 Global Action Plan

In 2004 and 2005, the Pew Center on Global Climate Change53 sponsored the Climate Dialogue at Pocantico,
New York, a series of four high-level meetings of twenty-five experts from governments, the business
community, and civil society from Argentina, Australia, Brazil, Canada, China, Germany, Japan, Malta, Mexico,
Tuvalu, the United Kingdom, and the United States. The Dialogue produced a report54 that presented
elements and approaches that could serve as the basis for a long-term global effort to combat global climate
change. These policy elements include establishing an aspirational long-term goal55 instead of negotiating a
quantified target; setting shorter-term emission targets but allowing them to vary in form, stringency, and
timing; using international emissions trading; regulating key industrial sectors using emissions caps,
technology requirements, or “best practice” agreements; linking development goals to climate objectives;
cooperating to develop new technologies and to deploy existing technologies in developing countries; and
providing adaptation assistance to vulnerable countries. The Report also recommends that nations
participate in informal dialogues to build consensus.

The Report recommended a future approach to allow for other types of targets beyond the Kyoto Protocol
targets.56 The possibilities stated in the report include57:

 Indexed or “intensity” targets limiting emissions relative to an indicator such as GDP, which would
provide greater cost certainty by allowing emissions to vary depending on whether an economy
shrinks or grows;
 Nonbinding “no-lose” targets, which would allow a country to market reductions below its target,
creating an incentive for stronger mitigation efforts, but entail no penalty if the target is exceeded; or

53
Now known as the Centre for Climate and Energy Solutions (C2ES) which was launched in 2011
54
“International Climate Efforts: Beyond 2012” Report of the Climate Dialogue at Pocantico (hereinafter called “the Report”).
The report can be found at http://www.pewclimate.org/docUploads/PEW_Pocantico_Report05.pdf
55
The Framework Convention establishes an ultimate objective: stabilizing GHG concentrations at a level that avoids
dangerous human interference with the climate (UNFCCC art. 2)
56
Kyoto Protocol employs a particular type of emissions target: a binding national target limiting absolute emissions relative
to the agreed baseline year ranging from -8 to +10%, relative to a base year of 1990
57
The Report, supra. at page 14
22
  Conditional targets, which would remain binding only under specified conditions – for instance, only
if compliance costs stay below a predetermined level.

4.3 The Clean Development Mechanism (CDM) in focus

The Report also considered amongst others the second market instrument established by the Kyoto
Protocol, i.e. the Clean Development Mechanism (CDM). The CDM enables countries with targets to purchase
certified emission reduction credits from countries without targets.58 Developed countries are provided
with lower-cost reduction while investment in sustainable development is encouraged in developing
countries. The CDM however allows crediting only of discrete projects.

The ability of the CDM to impose surcharges to help countries meet the costs of adaptation will depend upon
the elasticity of demand, which depends in turn on the supply available from non-Annex B regions. The
greater the supply and the lower the price, the greater the ability to impose surcharges without fear of
losing revenue.

Assuming effective accounting and enforcement, the acceptance of an Annex B emission limitation removes
the high costs of establishing additionality, which will be required of projects in non-Annex B countries. This
will encourage the most enterprising non-Annex B countries to accede to Annex B to capture more of the
large gains of early emissions trading. In doing so, parties will foster more efficient emissions trading and
promote the ultimate goals of the Kyoto Protocol, but they will also necessarily reduce the ability of the CDM
to act as a re-distributive mechanism.59

The Report therefore recommended that stronger incentive for broader-scale emissions reduction might be
achieved through a “programmatic” crediting approach. For instance, reductions across a given sector
driven by policies such as energy efficiency standards could, upon verification, be credited for sale on the
international emissions market.60

58
Nigeria is an example of a non-Annex 1 country without targets under the Kyoto Protocol
59
Ellerman, Jacoby and Decaux, “The Effects on Developing Countries of the Kyoto Protocol and CO2 Emissions Trading”
60
For emission reduction credits to be certified under the CDM, it must be demonstrated that a project would reduce
emissions from a projected baseline. A similar demonstration would be necessary under the “programmatic” approach
23
4.4 Negotiations on a Post-2012 Climate Change Regime

Although the Kyoto Protocol negotiations focused exclusively on the commitment of developed countries to
emissions reductions, the post-2012 climate change negotiations have also addressed developing country
mitigation actions, without which a solution to the climate change problem is impossible.61

The key issues that form the post-2012 negotiations are being debated between developed and developing
countries as well as between the United States and the European Union. Such key issues include the legal
form, regulatory approach and differentiation. For instance, will the post-2012 regime consist of separate
outcomes under the Kyoto Protocol and the UNFCCC, or will the two negotiating tracks merge into a single
outcome?62 Furthermore, will the post-2012 regime continue the top-down approach of the Kyoto Protocol,
in which internationally-defined commitments are adopted in order to drive national action? Or will the
regime switch to a more bottom-up approach, in which countries unilaterally define their own national
climate change approach, or adopt some kind of hybrid approach?63

In similar fashion, will the post-2012 climate change regime continue to draw an absolute wall between
developed and developing countries, as the Kyoto Protocol does? Or will it provide for greater parallelism or
symmetry between Annex 1 and non-Annex 1 countries – for example, by imposing legally-binding
commitments on both, or by adopting common rules on accounting, mechanisms, reporting, review and/or
compliance.64

One common criticism of the Kyoto Protocol was the non-participation of the United States and some
developing nations65 which led to arguments that the Protocol will have limited impact on the process of
global warming.

61
According to some estimates, developing country emissions will grow so rapidly over the next 20 years that, even if
developed countries were to phase out their greenhouse gas emissions completely, global emissions would still be higher in
2030 than now. See the Project Catalyst, “Limiting Atmospheric CO2e to 450 ppm – The Mitigation Challenge,” at 13 (Feb.
2009)
62
See Bodansky, supra.
63
Ibid.
64
Jacob Werksman, “Legal Symmetry and Legal Differentiation under a Future Deal on Climate Change”, 10 Climate Policy
672 (2010)
65
China and India represent significant portions of the earth’s emissions of greenhouse gases.
24
It is important to note that the United States did not ratify the Kyoto Protocol because it did not include the
“meaningful” participation of all developing as well as industrialized countries, arguing that ratification
would unfairly put the United States at a competitive disadvantage.66

Russia was also initially unclear about whether to ratify the Kyoto Protocol.67 Russia’s ultimate support was
due in large part to its desire to become a member of the World Trade Organization (WTO).

4.7 CONCLUSION

Nigeria signed the Kyoto-Protocol as a Non-Annex I state party, so she is not committed to take
immediate measures to curtail her carbon emissions. She however stands to benefit from
investments which can flow from some suggested polices in the protocol. It is our opinion that
Nigeria would be better served with a hybrid approach to mitigation of climate change. In other to
harness the benefits that the protocol offers in terms of mitigating global warming while at the
same time protecting the mainstay of her economy, Nigeria must as a matter of urgency do the
following

1. Seek for more stringent commitments by Annex1 Parties on clean technology

transfer to developing nations at all future negotiations on climate change.
2. Develop her Petroleum Gas potentials by fully implementing the Gas master plan so
as to avoid flaring which is a contributor of GHG.
3. Proactively source for investments under the Clean Development mechanisms
4. Diversify her Petroleum Sector from its mainly extractive nature. More attention
should be paid to developing and deploying non-fuel uses of petroleum and gas.

66
Aichele and Felbermayr, “Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade”;
CESifo Working Paper No. 3661, Category 9: Resource and Environment Economics, November 2011
67
It was in November 2011 that Russian President Vladimir Putin announced that his government would indeed pass the
agreement ensuring the Protocol would come into effect in 2005.
25