The Effects of CO2 and NO2 Emissions on Economic Growth in Nigeria

Abstract

This paper examined the relationship between carbon emissions and Nigeria's economic growth from 1985 to 2021. ARDL approach was adopted in analyzing the data. Gross domestic product (GDP) was used as a proxy for economic growth in Nigeria, while carbon dioxide (C0₂) emission, nitrous oxide (N0₂), and gross fixed capital formation (GFCF) were used as the independent variables. The findings revealed that Gross fixed capital formation had a significant positive influence on GDP in the short-run but a significant negative influence on GDP in the long-run. While nitrous oxide ((N0₂) emissions and carbon dioxide (C0₂) emissions follow the Kuznets curve of Grossman and Krueger (1995) of positive and negative impacts on GDP in the short-term and long-term, respectively. To have a carbon economy, it is recommended that the Nigerian government should both conceptualize and implement favourable policies and incentives (granting of tax credits to carbon-neutral corporations) from the government as a foundational catalyst for the development of green infrastructure and significant investments in renewable energy technology are immediately needed to keep pace with the country's growing population.