Energy consumption, economic development and environmental degradation nexus for Nigeria

Abstract

This study tests the existence of the Environmental Kuznets Curve (EKC) hypothesis for Nigeria using two environmental indicators vis-à-vis ecological footprint and carbon dioxide emissions. Data was sourced from World Development Indicators (WDI) and the Global Footprint Network for the period spanning from 1981 to 2019.The Auto Regressive Distributed Lag (ARDL) method was employed. It was observed that short-run and long-run relationships exist among the variables. Findings revealed that in the short and long run, energy consumption has positive effects on CO₂ emissions in Nigeria. However, for ecological footprint, only energy consumption in the three lagged period has a positive relationship with EFP in the short run without any significant effect being observed in the long run. Similarly, an inverted U-shaped environmental degradation-economic development relationship was established in the study which validated the EKC hypothesized inverted U-shape for CO₂ emissions. However, for EFP, there was no evidence of the EKC. As such, the shape of the EKC curve is subject to the environmental indicators employed. The study therefore recommends an increase in the use of alternative sources of energy that are relatively free from pollutant emissions as an alternative and viable option for Nigeria.