Impact Of Economic Growth On Environmental Pollution In Nigeria
Keywords:
Environmental Pollution, Economic Growth, Regulatory Quality, CO2 EmissionAbstract
There are concerns that Nigeria’s economic growth may be contributing to environmental degradation, particularly through increased carbon emissions and pollution-intensive investments. This study examines the impact of economic growth on environmental pollution in Nigeria, with a focus on whether economic expansion aligns with the Environmental Kuznets Curve (EKC) hypothesis, which suggests that pollution initially rises with growth but declines as income levels increase. To investigate this relationship, the study adopts the Autoregressive Distributed Lag (ARDL) model, using annual data from 1986 to 2024. Findings indicate that GDP per capita has a nonlinear relationship with carbon emissions, confirming the EKC hypothesis. Additionally, foreign direct investment (FDI) significantly contributes to environmental pollution, supporting the pollution haven hypothesis, which argues that weak regulatory frameworks attract environmentally harmful investments. Conversely, regulatory quality (RRQ) is found to have a strong mitigating effect on emissions, highlighting the importance of institutional governance in environmental management. The error correction model (ECM) results show that deviations in emissions gradually adjust to long-run equilibrium, suggesting that sustained policy interventions are necessary to maintain environmental stability. Based on these findings, the study recommends strengthening environmental regulations, promoting green foreign investments, investing in clean technologies, and fully implementing Nigeria’s National Energy Transition Plan (NETP) to balance economic growth with environmental sustainability.
References
Acheampong, A. O., & Boateng, E. (2023). Revisiting the FDI-environmental degradation nexus: Do structural breaks and quantile regressions matter? Environmental Science and Pollution Research, 30(8), 19457–19473.
Acheampong, A. O., Adams, S., & Boateng, E. (2019). Do globalization and renewable energy contribute to carbon emissions mitigation in sub-Saharan Africa? Science of the Total Environment, 677, 436–447.
Adebayo, S., & Salisu, M. (2023). Oil dependency and environmental sustainability in Nigeria: Challenges and prospects. Energy Policy Review, 28(2), 102-118.
Adebayo, T. S., Alola, A. A., & Yalçiner, K. (2022). Do structural breaks and asymmetries matter for the energy-growth nexus in oil-dependent economies? Energy Strategy Reviews, 41, 100857.
Adeleke, R., & Yusuf, T. (2021). Industrial growth and pollution in Nigeria: A sectoral analysis. African Economic Journal, 17(4), 33-50.
Adeola, J., & Ibraheem, A. (2021). Economic growth and environmental sustainability: An empirical review of Nigeria’s policies. Nigerian Journal of Economics, 19(1), 90-112.
Adetunji, O., & Osho, T. (2022). Policy gaps in Nigeria’s environmental sustainability framework. Journal of Environmental Policy, 15(3), 45-67.
Ahmed, K., Bhattacharya, M., Shaikh, Z., Ramzan, M., & Abbas, S. (2020). Revisiting the EKC hypothesis for South Asia: The role of globalization and energy consumption. Environmental Science and Pollution Research, 27, 26610–26622.
Akinyemi, S., & Olayemi, F. (2023). The impact of fossil fuel consumption on air quality in Nigeria. Energy and Environment Studies, 11(2), 56-72.
Alam, M. S., Paramati, S. R., Shahbaz, M., & Bhattacharya, M. (2021). The role of financial development and regulatory quality in environmental sustainability: Evidence from emerging markets. Journal of Environmental Management, 290, 112581.
Amnesty International. (2021). Oil spills in the Niger Delta: The continuing environmental disaster.
Balcilar, M., Bekun, F. V., & Yildirim, S. (2021). The role of ICT and financial development in CO₂ emissions and economic growth: A comparison of emerging and developed economies. Environmental Science and Pollution Research, 28, 21476–21491.
Central Bank of Nigeria. (2023). Annual report on oil revenue and environmental sustainability.
Chen, X., & Zhang, J. (2022). Regulatory quality and carbon emissions: Evidence from Asian economies. Journal of Cleaner Production, 333, 130139.
Cole, M. A., Elliott, R. J. R., & Fredriksson, P. G. (2006). Endogenous pollution halos: Does FDI influence environmental regulations? The Scandinavian Journal of Economics, 108(1), 157–178. https://doi.org/10.1111/j.1467-9442.2006.00438.x
Cole, M. A., Elliott, R. J. R., & Fredriksson, P. G. (2006). Endogenous pollution halos: Does FDI influence environmental regulations? The Scandinavian Journal of Economics, 108(1), 157–178. https://doi.org/10.1111/j.1467-9442.2006.00438.x
Dutta, A., & Das, D. (2021). Investigating the F-bound testing approach for cointegration: A re-evaluation. Economic Modelling, 101, 105536.
Eboh, C., et al. (2022). Fossil fuel consumption and greenhouse gas emissions: A Nigerian perspective. Environmental Economics Journal, 23(2), 78-96.
Energy Commission of Nigeria. (2023). Renewable Energy Master Plan (REMP) 2030.
Eze, B., & Chukwuma, I. (2021). Industrial emissions and regulatory challenges in Nigeria: A policy perspective. Nigerian Journal of Policy Studies, 14(2), 120-138.
Federal Ministry of Environment. (2023). Nigeria’s National Energy Transition Plan (NETP): Strategies for achieving net-zero emissions by 2060.
Global Gas Flaring Tracker. (2023). Gas flaring in Nigeria: An annual review.
Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement. National Bureau of Economic Research Working Paper, No. 3914. https://doi.org/10.3386/w3914
Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement. National Bureau of Economic Research Working Paper, No. 3914. https://doi.org/10.3386/w3914
Grossman, G., & Krueger, A. (1995). Economic growth and the environment. Quarterly Journal of Economics, 110(2), 353-377.
International Energy Agency. (2023). Nigeria’s energy consumption and pollution trends.
Khan, M. I., Zhang, X., & Abbas, S. (2023). Investigating the environmental Kuznets curve in India: The role of renewable energy and policy reforms. Journal of Cleaner Production, 395, 136389. https://doi.org/10.1016/j.jclepro.2023.136389
Khan, M. I., Zhang, X., & Abbas, S. (2023). Investigating the environmental Kuznets curve in India: The role of renewable energy and policy reforms. Journal of Cleaner Production, 395, 136389. https://doi.org/10.1016/j.jclepro.2023.136389
Korkmaz, T., & Ceylan, R. (2021). Time series analysis of FDI and economic growth in emerging markets: Lag length selection and model performance. International Journal of Finance & Economics, 26(3), 4356–4374.
Kumar, R., Singh, S., & Prakash, A. (2020). Stability analysis of economic models using CUSUM and CUSUMSQ tests: A comparative approach. Applied Economics, 52(45), 4927–4943.
Mensi, W., Hammoudeh, S., Tiwari, A. K., & Nguyen, D. K. (2020). Oil price and stock market dynamic interdependencies: The role of the F-bound test. Energy Economics, 90, 104840.
Narayan, P. K., & Popp, S. (2019). Investigating structural breaks and long-run stability in macroeconomic models. Journal of Macroeconomics, 61, 103127.
National Bureau of Statistics. (2023). Nigeria’s GDP performance and sectoral contributions.
Nguyen, T. T., & Vo, D. H. (2023). Comparing AIC and SC for lag selection in financial time series analysis: A case study from Southeast Asia. Journal of Empirical Finance, 70, 105425.
Nkoro, E., & Uko, A. K. (2018). Autoregressive Distributed Lag (ARDL) cointegration technique: Application and interpretation. Journal of Statistical and Econometric Methods, 7(4), 63–91.
Ogundipe, A., & Adeyemi, K. (2022). Green technology adoption and emissions reduction in Nigeria. Journal of Sustainable Energy, 18(2), 44-60.
Okafor, U. (2022). The Nigeria Climate Change Act and its implications for sustainable development. African Environmental Law Review, 10(3), 134-152.
Okonkwo, D., & Uchenna, P. (2022). Urbanization and environmental degradation in Nigeria: A case study of Lagos. Journal of Urban Development, 21(1), 67-84.
Olayemi, A. A., & Osabuohien, E. S. (2022). Assessing economic growth and environmental sustainability in sub-Saharan Africa: An ARDL approach. Economic Analysis and Policy, 75, 348–361.
Padhan, P. C., Dash, S., Tiwari, A. K., & Hammoudeh, S. (2021). Foreign direct investment and carbon emissions: The role of environmental regulations in emerging markets. Resources Policy, 73, 102234.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2019). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 34(1), 1–31.
Shahbaz, M., Nasreen, S., Abbas, F., & Anwar, S. (2020). Environmental Kuznets curve in emerging economies: The role of financial development and trade openness. Renewable and Sustainable Energy Reviews, 119, 109551.
Shahbaz, M., Tiwari, A. K., & Nasreen, S. (2021). Testing the normality of residuals in ARDL models: A critical review. Economic Modelling, 98, 501–514.
Smith, J. A., Williams, T. R., & Becker, L. (2023). The role of European climate policies in achieving economic growth decoupling from carbon emissions. Energy Policy, 178, 113478. https://doi.org/10.1016/j.enpol.2023.113478
Smith, J. A., Williams, T. R., & Becker, L. (2023). The role of European climate policies in achieving economic growth decoupling from carbon emissions. Energy Policy, 178, 113478. https://doi.org/10.1016/j.enpol.2023.113478
Stern, D. I. (2004). The rise and fall of the environmental Kuznets curve. World Development, 32(8), 1419–1439. https://doi.org/10.1016/j.worlddev.2004.03.004
Stern, D. I. (2004). The rise and fall of the environmental Kuznets curve. World Development, 32(8), 1419–1439. https://doi.org/10.1016/j.worlddev.2004.03.004
Tiwari, A. K., Shahbaz, M., & Nasreen, S. (2020). The role of structural breaks in environmental degradation models: Evidence from ARDL-based studies. Environmental Research, 185, 109465.
United Nations Environment Programme. (2023). The state of the environment in Africa: Focus on Nigeria.
Usman, K., & Bello, J. (2023). Bureaucratic delays in environmental policy implementation in Nigeria. Policy and Governance Review, 16(2), 88-105.
Wang, H., Li, Z., & Zhao, Y. (2023). Economic growth, FDI, and carbon emissions in China: Revisiting the environmental Kuznets curve. Environmental Science & Policy, 146, 789–802. https://doi.org/10.1016/j.envsci.2023.789802
Wang, H., Li, Z., & Zhao, Y. (2023). Economic growth, FDI, and carbon emissions in China: Revisiting the environmental Kuznets curve. Environmental Science & Policy, 146, 789–802. https://doi.org/10.1016/j.envsci.2023.789802
World Bank. (2022). Air pollution in Lagos: An assessment of particulate matter levels.
World Health Organization. (2023). Environmental pollution and public health risks in Nigeria.
Zhang, L., & Zhao, X. (2024). The decoupling of economic growth and carbon emissions in the United States: The impact of renewable energy and technological innovation. Renewable and Sustainable Energy Reviews, 170, 112983. https://doi.org/10.1016/j.rser.2024.112983
Zhang, L., & Zhao, X. (2024). The decoupling of economic growth and carbon emissions in the United States: The impact of renewable energy and technological innovation. Renewable and Sustainable Energy Reviews, 170, 112983. https://doi.org/10.1016/j.rser.2024.112983