Pollutant Emissions, Energy Consumption and Economic Growth in Nigeria: A Multivariate Granger Causality Framework

• Published in: International journal of energy economics and policy Vol. 6; no. 2; p. 202
• Main Authors: Alege, Philip O, Adediran, Oluwasogo S, Ogundipe, Adeyemi A
• Format: Journal Article
• Language: English
• Published: Mersin EconJournals 01-04-2016
• Subjects: Carbon dioxide; Causality; Clean technology; Climate change; Economic growth; Electric power; Electricity; Electricity distribution; Emissions; Energy consumption; Energy economics; Energy industry; Energy resources; Fossil fuels; GDP; Gross Domestic Product; Growth rate; Multivariate analysis; Per capita; Pollutants; Social sciences; Sustainable development; Time series; Nigeria
• ISSN: 2146-4553; 2146-4553

The study investigates the direction of causal relationships among emissions, energy consumption and economic growth in Nigeria using annual time series data for the period 1970-2013. The Johansen maximum likelihood cointegration tests indicate an existence of a unique cointegrating vector, and the normalized long run estimates shows that fossil fuel enhances carbon emissions whereas, clean energy source (electricity) mitigate the atmospheric concentration of CO2 emissions. Similarly, the Wald exogeneity Granger causality test indicates an existence of unidirectional causation running from fossil fuel to CO2 emissions and GDP per capita. Alternatively, non-fossil energy (electric power) causes more proportionate change in GDP per capita but our result could not establish any causal link between electric power and carbon emissions. Finally, charting a channel towards ensuring sustainable environment and economic development involves a progressive substitutability of clean energy sources for fossil consumption.