Impact of asset intensity and other energy-associated CO₂ emissions drivers in the Nigerian manufacturing sector: A firm-level decomposition (LMDI) analysis

The study considered the impacts of asset intensity and other energy-associated ${\text{CO}}_2$ emissions drivers in the Nigerian manufacturing sector from 2010 to 2020. The Logarithmic Mean Divisia Index (LMDI) was used to explore the driving factors of ${\text{CO}}_2$ emissions: asset intensity, economic output, economic structure, energy intensity, energy mix, and carbon emission coefficient. From the results, the ${\text{CO}}_2$ emissions decreased from 7.49 ${\text{MtCO}}_2$ in 2010 to 3.22 ${\text{MtCO}}_2$ in 2020. Furthermore, among the emissions drivers, the energy mix effect increased ${\text{CO}}_2$ emissions by 0.50 ${\text{MtCO}}_2$, followed by asset intensity (0.29 ${\text{MtCO}}_2$) and economic structure (0.11 ${\text{MtCO}}_2)$. The energy intensity, economic output, and emission coefficient effects inhibited ${\text{CO}}_2$ emissions by -4.64 ${\text{MtCO}}_2$, -0.42 ${\text{MtCO}}_2$, and -0.01 ${\text{MtCO}}_2$ respectively. The contribution of the subsectors' emissions shows that the Other Manufacturing subsector emitted 14.62 ${\text{MtCO}}_2$, while Chemical and Pharmaceutical emitted 14.61 ${\text{MtCO}}_2$, Food, Beverages and Tobacco, 7.55 ${\text{MtCO}}_2$, Textile, Apparel, and Footwear, 6.63 ${\text{MtCO}}_2$, Basic Metal and Iron and Steel, 5.15 ${\text{MtCO}}_2$, Plastic and Rubber Products, 2.99 ${\text{MtCO}}_2$, Agro-Allied, 2.71 ${\text{MtCO}}_2$, Oil Refining, 2.01 ${\text{MtCO}}_2$, and Pulp and Paper Products, 1.76 ${\text{MtCO}}_2$. The results indicated that the effect of asset intensity on emission growth is significant and should not be overlooked. Likewise, the effects of ${\text{CO}}_2$ emission drivers were found to impact differently across the subsectors. The latter suggests that firm-specific indicators in the respective subsectors should be one of the primacies during policy development since the driving factors of ${\text{CO}}_2$ emissions fluctuate across the subsectors.