Clean energy investment is defined as follows: investment into an energy supply and utilization system that provides the required energy with minimal negative environmental and social consequences. Investment into clean energy systems can also be viewed as an investment into energy sources and technologies that are significantly less environmentally damaging than in the status quo case. Investment into clean energy systems provides the most effective and optimally efficient path to an increased CDM participation in Nigeria and hence an effective participation in the global carbon market.

Nigeria is one of the highest emitters of greenhouse gases in Africa. The practice of flaring gas by the oil companies operating in Nigeria has been a major means through which greenhouse gases are released into the atmosphere. Carbon dioxide emissions in this area are among the highest in the world. Some 45.8 billion kW of heat are discharged into the atmosphere of the Niger Delta from flaring 1.8 billion ft³ of gas every day. Gas flaring has raised temperatures and rendered large areas uninhabitable. Between 1970 and 1986, a total of about 125.5 million m³ of gas was produced in the Niger Delta region, about 102.3 (81.7 %) million m³ were flared, while only 2.6 million m³ were used as fuel by oil-producing companies and about 14.6 million m³ were sold to other consumers. The use of renewable energy sources will reduce the over dependence on the burning of fossil fuel. Moreover, instead of flaring gas in Nigeria, the gases can be converted to methanol and used as a fuel for both domestic and industrial use. With good energy efficiency practices and products, the burning of fossil fuel for energy will be greatly minimized.

The salient characteristics of clean energy investment are as follows:

(RECOMMENDED FOR ALL DEVELOPING NATIONS THROUGH THE CLEAN DEVELOPMENT MECHANISM)

The Clean Development Mechanism (CDM) was integrated to the Kyoto Protocol as the United Nations Framework Convention on Climate Change. CDM projects allow investment by entities from industrialized countries into projects in developing countries. In return for this investment, carbon credits (in this case, certified emission reductions) are received by the investor in the industrialized country. This enables the industrialized country to meet its emission reduction targets given by the Kyoto Protocol more cost-effectively, while promoting sustainable development in developing countries. CDM projects may also be unilateral, i.e., they take place in the developing country without a project partner from an industrialized nation.

• The resulting system results in little or no emissions of obnoxious gases and particulates
• The clean energy technologies have a carbon footprint that is much lower than the baseline emission scenario
• The technology is accessible, and the required investment is available for adoption in developing countries like Nigeria
• The implementation of the clean energy technology will contribute to sustainability.