Assessment of the Validity of the Environmental Kuznets Curve (EKC) Hypothesis in the Nigerian Economy

The Environmental Kuznets Curve (EKC) hypothesis is a theory based on income inequality and economic growth/development. It seeks to identify the relationship between different indicators of environmental pollution and per capita income. The theory suggests that environmental quality decreases in early periods of economic growth; but after a certain level of economic advancement, the economy begins to experience environmental quality increase. This study is carried out to confirm whether the EKC theory is applicable in Nigerian economy. The study employed quarterly time series data ranging from 1992 – 2024. For analysis the vector error correction model (VECM) and causality estimation techniques among others were adopted to test the validity of the EKC hypothesis in the Nigerian economy. It was established that the EKC theory of inverted – U shaped relationship between economic growth (GDP) and carbon dioxide (Co2) emission (through industrial development) is applicable in the Nigerian economy. This highlights the fact that high level of economic activities in pursuit of economic growth significantly increases Co2 emission which in turn reduces environmental quality at the initial stage. But as the economy advances it becomes environmental friendly. Policy options to strengthen and maintain sustainable growth in Nigerian economy without neglecting or compromising environmental sustainability have been suggested.