Beyond the Ton: Carbon Credits Are Not What You Think They Are.

Carbon credits are NOT trees; they are NOT donations and certainly NOT CSR points for your ESG report.                                                                                                                                                                       

Introduction

Carbon credits have arguably become one of the most misunderstood assets in modern commerce, despite their growing economic significance. Originally conceived as an environmental policy tool to reduce greenhouse gas emissions, carbon credits have evolved into commercially valuable intangible assets that influence investment decisions, underpins multi-million-dollar transactions and increasingly raise important questions around commercial law, private property and taxation. To some, they are synonymous with tree-planting campaigns or a convenient means by which large corporations compensate for pollution. Others view them simply as another metric within Environmental, Social and Governance (ESG) reporting. However, both perceptions capture only a fraction of what carbon credits have become. This article therefore examines what a carbon credit really is, their regulatory landscape especially in Nigeria, why companies are willing to spend billions acquiring them and why these instruments increasingly deserve attention not merely as environmental tools, but as assets with significant legal, commercial and tax implications.

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