Impact Of Economic Growth On Environmental Pollution In Nigeria

Abstract

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.