An econometric analysis of the macroeconomic determinants of carbon dioxide emissions in Nigeria

Nwedeh Chukwuemeka Cosmas; Isaac Chitedze; Khaldoon A Mourad

doi:10.1016/j.scitotenv.2019.04.188

An econometric analysis of the macroeconomic determinants of carbon dioxide emissions in Nigeria

Sci Total Environ. 2019 Jul 20:675:313-324. doi: 10.1016/j.scitotenv.2019.04.188. Epub 2019 Apr 17.

Authors

Nwedeh Chukwuemeka Cosmas¹, Isaac Chitedze², Khaldoon A Mourad³

Affiliations

¹ African Development Bank, Power, Energy, Climate Change & Green Growth Complex, The Department of Energy Finacial Solutions, Policy & Regulation, Immeuble du Centre International d'Abidjan (CCIA), Avenie Jean Paul II 01 B.P. 1387, Abidjan Cote D'Ivoire, Côte D'ivoire.
² Mzuzu University, P/Bag 201, Luwinga, Mzuzu, Malawi.
³ Faculty of Social Sciences, Centre for Middle Eastern Studies, Lund University, Sweden. Electronic address: khaldoon.mourad@cme.lu.se.

PMID: 31030138
DOI: 10.1016/j.scitotenv.2019.04.188

Abstract

This study examined an econometric analysis of the macroeconomic determinants of carbon dioxide (CO₂) emission in Nigeria, covering the periods between 1981 and 2016, employing both linear and non-linear Autoregressive Distributed Lag (ARDL & NARDL) models. The time series data used were sourced from the database of the World Bank Development Indicators, 2016 and Central Bank of Nigeria Statistical Bulletin, 2017 edition. The main macroeconomic variables driving CO₂ emissions in Nigeria were considered. The time series properties of the data were examined using the Augmented Dickey Fuller (ADF) unit root tests for stationarity, and it was found that all the variables were first differenced stationary, except financial development and population density that were stationary at the level form. The finding from environment-economic relationship refutes the validity of the Environmental Kuznets Curve (EKC) and found N-shaped relationship in Nigeria. Overall changes in GDP per capita showed strong magnitudes of impacts on CO₂ emission and GDP per capita bi-directionally granger caused energy consumption, which reversely caused increase in CO₂ emission. Trend analyses revealed that emission fell from 0.64 metric tons between 2005 and 2010 to 0.52 metric tons between 2011 and 2016. Based on these results, a concerted effort of Ministry of finance in partnership with the ministry of environment in strengthening green bond issuance, subsidies and incentives to encourage the competitiveness of renewable energy technologies is paramount. The government must also initiate carbon tax for polluting industries and increase energy supply to stimulate industrial production since increase in energy consumption exhibited negative relationship with CO₂ emissions.

Keywords: Augmented Dickey Fuller; Autoregressive distributed lag; GDP; Renewable energy; Subsidies.