The Environmental Impact of Energy Consumption in Nigeria: Evidence from CO2 Emissions

Abstract The consumption of energy to achieve economic growth has immensely impacted Nigeria’s environment through its influence on CO2 emissions. The paper employed Vector Error Correction Model (VECM) to analyzed the environmental impact of energy consumption in Nigeria using time series data from 1990–2018. Our study found a long run positive impact of GDP on CO2 emissions in Nigeria. This refute the Environmental Kuznet Curve hypothesis that environmental quality improved with an increase in income. We also found that charcoal consumption has a long run tendency of reducing CO2 emission while fuel wood consumption has a long run possibility of raising CO2 emission. We also found that usage of gas oil has a negative impact on CO2 emissions while natural gas consumption and fuel oil consumption has a detrimental impact on CO2 emission. Hydroelectricity consumption on the other has a long run negative impact on CO2 emission in Nigeria. However, we suggested for investment in hydroelectricity and wood biomass energy consumption that can minimize the potential environmental damage in Nigeria. Because hydroelectricity and biomass energy can substitute fossil fuel energy in the production of goods and services which can also help to mitigate CO2 emissions and improve the environmental quality of the country.