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Electricity Supply, Fossil fuel Consumption, Co2 Emissions and Economic Growth: Implications and Policy Options for Sustainable Development in Nigeria

Author

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  • Chibueze, E. Nnaji

    (National Centre for Energy Research & DevelopmentUniversity of Nigeria, Nsukka)

  • Jude, O. Chukwu

    (Department of Economics, University of Nigeria, Nsukka)

  • Nnaji Moses

    (National Centre for Energy Research & Development, University of Nigeria, Nsukka)

Abstract

This paper investigates the causal relationship among electricity supply, fossil fuel consumption, CO2 emissions and economic growth in Nigeria for the period 1971-2009, in a multivariate framework.Using the bound test approach to cointegration, we found a short-run as well as a long-run relationship among the variables with a positive and statistically significant relationship between CO2 emissions and fossil fuel consumption. The findings also indicate that economic growth is associated with increased CO2 emissions while a positive relationship exists between electricity supply and CO2 emissions revealing the poor nature of electricity supply in Nigeria. Further, the Granger causality test results indicate that electricity supply has not impacted significantly on economic growth in Nigeria. The results also strongly imply that policies aimed at reducing carbon emissions in Nigeria will not impede economic growth. The paper therefore concludes that a holistic energy planning and investment in energy infrastructure is needed to drive economic growth. In the long-run however, it is possible to meet the energy needs of the country, ensure sustainable development and at the same time reduce CO2 emissions by developing alternatives to fossil fuel consumption, the main source of CO2 emissions.

Suggested Citation

  • Chibueze, E. Nnaji & Jude, O. Chukwu & Nnaji Moses, 2013. "Electricity Supply, Fossil fuel Consumption, Co2 Emissions and Economic Growth: Implications and Policy Options for Sustainable Development in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 3(3), pages 262-271.
    • Handle: RePEc:eco:journ2:2013-03-7
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    15. Ibitoye J. Oyebanji & Hlalefang Khobai & Pierre Le Roux, 2019. "Green Growth Policies and Sustainable Economic Growth in South Africa: An Autoregressive Distributed Lag and Toda-Yamamoto Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 184-193.
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    17. Akinyemi, Opeyemi & Ogundipe, Adeyemi & Alege, Philip, 2012. "Energy Supply and Climate Change in Nigeria," MPRA Paper 55820, University Library of Munich, Germany.
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    More about this item

    Keywords

    CO2 emissions; Economic growth; Electricity supply; Granger causality; Bounds testing; Fossil fuel consumption;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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