Authors: Andreas Beavor, UrbanEmerge; Samia Khan, UrbanEmerge; Dr Naji Makarem, UrbanEmerge; Benneth Obinna Obasiohia, UrbanEmerge; Nnanna Joemartins Oketa, UrbanEmerge; Pedro de Aragão Fernandes, Climate Policy Initiative

Accelerating the mainstreaming of net zero carbon building approaches throughout Nigeria’s built sector is critical. The country has a housing shortage of 17 million units,[1] and future estimated need of 700,000 units annually by 2050.[2]

This presents a major opportunity to tackle decarbonization within a vital sector. Buildings should also be designed to resist e shocks and stresses, and have longer life cycles.[3]

This report is part of a three-part series led by CCFLA to promote an understanding of financing barriers to net zero carbon buildings. This paper particularly focuses on Nigeria and assesses the current use of financial and policy instruments, and identifies how national, state, and local policy and regulatory frameworks can be improved to drive private and public investment in this sector.

We use CCFLA’s recently developed taxonomy of 75 financial and policy instruments to help address 22 identified barriers to achieving net zero buildings. We have adapted this model to the Nigerian context, based on desktop research, stakeholder interviews, and a survey of 100 Nigerian built sector professionals. This enables us to present country-specific high-impact implementation pathways for financial and policy instruments that can accelerate the shift to net zero carbon buildings.

KEY FINDINGS

• Stakeholders perceive net zero carbon building measures to be more expensive than conventional ones. This is not necessarily true, and construction and operational costs can be greatly reduced through innovative approaches and greater scale as the market develops.
• There are significant challenges to implementing net zero carbon buildings in Nigeria. Our survey of Nigerian construction and building sector professionals found four categories of barriers:

Table ES1: Barrier categories and their perceived prioritySource: CPI, based on consultants’ analysis

Note: The “Perceived priority” assessment is based on the responses of 100 participants who were asked to rank 22 barrier types according to perceived priority in Nigeria’s landscape (See Table 4 in Section 2 for a full of list of Barriers and their respective scores). The barriers are classified according to the severity score of 1 – (low) to 10 – (high) shown through a color gradient. The perceived severity score of each barrier is calculated based on the percentage of respondents who rated the barrier category as “3 = most challenging”. The score of “3 = most challenging” of each barrier is calibrated according to the percentage ratio of the highest response result out of the complete set of responses.

• Nigeria’s policy environment with respect to net zero carbon buildings is fragmented. While there is no overarching strategy or policy on net zero carbon buildings, a range of policies contain some relevant provisions. For example, while the 2017 National Building Energy Efficiency Code (BEEC) sets minimum efficiency requirements for new buildings, the 2021 National Climate Change Policy provides policy guidance on the retrofitting of buildings for energy efficiency. The identified 16 active policy instruments are generally nascent or early stage and mostly deployed on a small scale or through pilots. For example:
  • Import and use of extremely high-emitting materials is prohibited through the 2021 National Environmental (Air Quality Control) Regulation, and there is a federal ban on importing small electricity generators.
  • Four policy instruments are proposed for implementation soon, mainly relating to energy efficiency labeling. For example, the Federal Ministry of Environment is developing building energy performance standards under the BEEC.
  • There is also early-stage activity on energy efficiency and embodied carbon building codes through the BEEC, but states and LGAs have limited related regulatory frameworks or policies in place.
  • International organizations support the training of built environment professionals, but local government authorities (LGAs) do not have sufficient funds to expand this training.
• There are some well-established financial instruments for net zero carbon buildings in Nigeria, with strong potential for increasing the options available. We found 17 financial instruments that support them. Around half of these are at a nascent or early stage, with piecemeal and small-scale deployment.
  • Nigeria has one of the most advanced green bond markets in Sub-Saharan Africa, with significant activity on sovereign and corporate bonds but less on municipal or state bonds.
  • Conventional debt financing instruments (e.g., market-rate and concessional debt) are well-established, including for sustainable buildings.
  • Grants are extensively used to support sustainable development, with technical assistance grants well-established for net zero carbon buildings. However, result-based grants are at an early stage.

RECOMMENDATIONS

Based on previous CCFLA research, we have identified five high-impact focus areas as priorities for scaling up action on net zero buildings in Nigeria (Table ES1) and have expanded upon these through new Nigeria-focused research and stakeholder interviews.

Table ES2: High-impact focus areas for net zero buildingsSource: CPI, based on consultants’ analysis.

• In addition, we identified several recommended policy and financial instruments that can help scale up net zero carbon buildings in Nigeria. Table ES2 shows where these could support action in the five high-impact focus areas. It includes (i) that are not yet active[6] in the net zero carbon building sector (tagged in green), which have been selected using the CCFLA model. It also includes (ii) other recommended instruments[7] to introduce, scale up, or improve the implementation based on what is working well and/or is likely to have a strong impact in Nigeria (tagged in blue). Section 3.4 goes into more detail by presenting not only instruments recommended by the CCFLA model, but also their respective implementation pathways, highlighting interdependencies between the ‘end point’ instrument and others in the taxonomy to achieve an ideal setting for scaling up net zero carbon buildings in Nigeria.

Table ES3. Recommended instruments for Nigeria
Source: CPI, based on consultants’ analysis

Further general recommendations to help create an enabling environment for net zero carbon buildings in Nigeria are listed below.

• While state-level interventions are likely to be most effective in accelerating uptake, LGAs can contribute to the formation of state policy. City-led policies and initiatives are unfeasible in most of Nigeria, given that there are next to no city-level governance structures. Each city is fragmented into multiple Local Government Authorities (LGAs), with coordination happening at the state level. S governments could assess the viability of creating a body to coordinate LGAs’ action on net zero carbon buildings in a given state or area.
• Establishing a national net zero carbon building policy or strategy and developing priority policies and incentives in collaboration with key stakeholders can incentivize efforts and strengthen enforcement of existing policies.
• All levels of government should lead by example in ways that demonstrate net zero carbon building approaches. Governments can pilot such approaches in order to focus resources and ensure that learning points are captured and applied.
• It is essential to increase awareness of the need for net zero carbon practices and develop the capacity to apply them in Nigeria’s building sector. It will also help to develop robust and up-to-date curricula on net zero carbon buildings that can be taught in higher education institutions.
• Policies must also support the nexus between building affordability, net zero carbon aspects, and local job creation. The principles of a just transition must therefore be applied, considering aspects including skills development, the gender dynamics of accessing finance, access to household-scale energy, and affordability of homes.
• Adaptation to climate change impacts is also vital in Nigeria, where desertification, water stress, and extreme heat are likely to increase. We should mainstream it through relevant aspects of the priority sectors above, such as increased and inclusive access to sustainable cooling.

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[1] Realty, B. (2021) At 61, Nigeria should renew commitment to sustainable housing. Available online.

[2] UN DESA (2018) World Urbanization Prospects: The 2018 Revision. Available online.

[3] Building Green. (2023) Resilient Design. Available online.

[4] Climate Policy Initiative (2022a) Financing Net Zero Carbon Buildings: A Background and Scoping Paper. Cities Climate Finance Leadership Alliance. Available online.

[5] Embodied carbon represents carbon emissions released during the lifecycle of building materials, including extraction, manufacturing, transport, construction, and disposal.

[6] The methodology was defined so that only end-point instruments that are not active (Proposed or Not Used) could have their instrument pathways recommended.

[7] The additional recommended instruments were selected based on interview findings and desktop research, and account for both inactive and active instruments, except those that are well-established.