With the rising climate change concerns, there have been contrasting arguments regarding the effect of economic activities on carbon emissions in a nation. The study adopted the econometric models, the Pairwise Granger Causality test, and the Autoregressive Distributed Lag model (ARDL). The ARDL bounds test for cointegration indicated that carbon emission and economic growth in Nigeria have a long-run relationship. Similarly, the long-run coefficients indicated that asides Energy Use, all independent variables have a significant effect on carbon emissions in the long run. However, the squared GDP and population growth have positive effect on carbon emissions, while GDP, trade openness, financial sector development and urbanization have negative effect on carbon emissions in the long run. Furthermore, the ECM coefficient was negative and statistically significant, meaning that in the event of any economic disequilibrium, the system will correct itself in the short run at a rate of 76 percent every quarter, eventually attaining long-term equilibrium. For the Granger Causality, result indicated that a significant bidirectional relationship exists between carbon emission and economic growth in Nigeria. It was recommended that a balance be established between carbon emission and economic growth in Nigeria by ensuring that unproductive activities that results in carbon emission are curtailed.
Keywords: Carbon intensity, Environmental Kuznets Curve, Clean technologies, Energy use.
Paul A. Orebiyi, Ubong E. Effiong & Joy Udeme (2023). Economic Growth and Carbon Emissions Nexus: Evidence from Nigeria. Journal of Applied Financial Econometrics, Vol. 4, No. 2, pp. 133-163. https://
DOI:10.47509/
JAFE.2023.v04i02.02