CONSEQUENCE OF ENVIRONMENTAL POLICY ON THE DYNAMICS OF ECONOMIC GROWTH AND ENVIRONMENTAL DEGRADATION IN NIGERIA

Abstract

Recently, more attention has been given to the growth effects of a deterioration in the quality of the environment due to increased accumulation of emissions. Studies have put forth several hypotheses represented by Environmental Kuznets Curve (EKC) which postulate there is an inverted–U-shaped relationship between per capita income and indicators of environmental degradation. Despite the proliferation of research on the EKC hypothesis, no consensus has been reached in the field regarding the validation of the hypothesis. The purpose of this paper is to contribute to the debate concerning the relationship between per capita GDP and per capita emissions of the greenhouse gas carbon dioxide (CO2) to observe the possible influence of economic growth on environmental degradation in Nigeria. This paper uses an Environmental Kuznets Curve (EKC) analysis approach. During the paper, the consequence of environmental policy on environmental quality in the country was investigated. Time series data spanning the period 2000-2019 is used and the Auto Regressive Distributed Lags (ARDL) approach to co-integration is adopted for the purpose of analysis. Concerning CO2 emission, the anticipated EKCs is not found to exist in this study. The coefficient of log of GDP (Gross Domestic Product) is -41.4 and that of log of GDP² is 5.3. This fallows 'U' shape instead of inverted 'U' shape curve for Nigeria. Furthermore, a 1% change in log of EPO (environment policy) in the previous year leads to a decrease in environmental degradation by 2.4% of that unit change in the short run. There is need for a clean revolution in industrial production in Nigeria. In addition, more local and national sustainability efforts are needed on several fronts, especially vis-a-vis water and sanitation, as well as in terms of air quality.