Gus Anyim
Lagos — Africa, along with most of the world, is critically behind schedule on commitments within the international treaty on climate change – the Paris Agreement. Perhaps because the continent only contributes 4% to global emissions, it often plays an understated role in the fight against global warming.
As swathes of African land and forestry, a tool for combating climate change, have attracted overseas interest, it is evident things are changing.
Blue Carbon, a UAE based firm – under the patronage of Sheikh Al Maktoum (ruler of Dubai) caught newspaper headlines earlier in 2024 by striking several conservation agreements across Zimbabwe, Zambia, Kenya, Liberia and Tanzania.
While this should be celebrated as a dramatic intervention for the planet’s welfare. Sceptics suggest the real purpose is to use the land as carbon offsets, allowing the UAE’s biggest polluters (oil companies) to offset their emissions with investment in conservation. Continuation rather than curbing oil production.
As the biggest economy in Sub-Saharan Africa, Nigeria has an instrumental role both in its own commitments and in contribution to the wider African effort to reduce carbon emissions. Alongside nurturing Nigeria’s natural assets, blockchain technology and Bitcoin can play a role in this change.
Enter Bitcoin and Blockchain Technology
For Bitcoin miners, like NRG Bloom, a country like Nigeria has the local elements for a circular flow of emissions and offsets. Solutions that are local and regional rather than offsetting emissions from thousands of miles away.
Energy producers, whether electricity suppliers, mini-grids or oil and gas companies are an opportunity. They often have access to stranded energy that is not economically viable to transport, ship or supply for various reasons. Gas flared during oil extraction being a primary example.
For Bitcoin this energy, if transformed, represents income.
The cryptocurrency has been adding to its importance in electricity supply economics, particularly in developing economies.
Bitcoin mining is the competitive use of computing power to create new Bitcoin and increase its supply using a global network of machines. While the full context of producing Bitcoin is beyond the scope of this piece, the key takeaway is that Bitcoin miners need a plentiful supply of electricity to operate. In doing so the industry has had to make a notable shift to clean energy sources.
Established optimally, the process of Bitcoin mining encourages electricity producers to always maximise production. Any excess supply is then used by mining companies to generate Bitcoin. While this remains a core value proposition to energy suppliers, the Bitcoin network has evolved. With it are extended possibilities on how to localise carbon emissions reductions and offsets.
Creating a circular economy
Having paid $602M (2023) in penalties, it appears that sustainable change must be delivered faster for Nigerian oil companies that continue to flare gas.
During COP27 (2022), the UN’s annual climate change conference, the Africa Carbon Markets Initiative introduced a multi-national scheme for 300M new African carbon credits for African emission offset projects.
A step further would be for Nigerian companies to localise efforts under regenerative finance (ReFi). The evolving umbrella term incorporating agricultural, renewable and social initiatives with financial impact and growth.
Nigerian oil companies could redirectflared gas from atmospheric burning to electricity. Supplying local economies first. The surplus could then power Bitcoin mining, generating new revenue and jobs whilst reducing methane emissions.
Platforms like Kenya’s Verst could show how Nigerian conservation projects can be planned, financed and delivered. While localised exchanges with the functionality of ACX, Toucan or Carbonlink can be used to find, trade and retire carbon credits. Blockchain technology would underpin all these measures, ensuring tamper proof verification of emissions records and activity.
Niger Delta – Nigeria’s Carbon Sink
Although the Niger Delta remains eco-rich with reserves of oil, it is also a region struggling with electricity shortages, affecting 200 million people. After years of environmental damage from oil spills, illegal extraction and refinery, the network of waterways has suffered tremendously. It is estimated that $12BN and 12 years to address the catastrophic damage in Bayelsa State alone.
Despite bearing the brunt of climate change, the region offers enormous opportunities to support climate initiatives. In Southern Nigeria and the Niger Delta, the wetlands are a rich source of trees and plant life, the type highly sought after as carbon offsets.
Nigeria, with approximately 10.5km2, has the third largest resource of mangroves in the world. Research suggests that over the course of its life one mangrove tree removes 0.3 tonnes of CO2, making the region an enormous potential source of carbon extraction (known as a carbon sink).
Despite the area being subject to extreme stress from the oil and deforestation, it is still considered a key resource in the fight against emissions and the potential certainly remains.
A Look Ahead
With initiatives well underway to reduce carbon emissions in Nigeria and across Africa. Bitcoin and blockchain technology are encouraging ideas on emissions reduction beyond those already in place within the energy industry.
From repurposing waste gas to energy, to being able to quantify, reforest and protect against further decline. Africa, through technology, certainly has solutions to both global and its own problems.
Bitcoin mining has a role but it must be thoughtfully delivered and in tune with wider needs, such as environmental regeneration, in the region.