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Application of Decoupling Approach to Evaluate Electricity Consumption, Agriculture, GDP, Crude Oil Production, and CO 2 Emission Nexus in Support of Economic Instrument in Nigeria

Author

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  • Mathy Sane

    (Faculty of Forestry and Wood Sciences, Czech University of Life Sciences Prague, Kamýcká 129, 16 500 Praha-Suchdol, Czech Republic)

  • Miroslav Hajek

    (Faculty of Forestry and Wood Sciences, Czech University of Life Sciences Prague, Kamýcká 129, 16 500 Praha-Suchdol, Czech Republic)

  • Joseph Phiri

    (Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcká 129, 16 500 Praha-Suchdol, Czech Republic)

  • Jamilu Said Babangida

    (Department of Economics, Ahmadu Bello University, Zaria 810222, Nigeria
    Department of Economics, Yildiz Technical University, Istanbul 34220, Turkey)

  • Chukwudi Nwaogu

    (Department of Environmental Management, School of Environmental Sciences, Federal University of Technology, Owerri, P.M.B. 1526, Owerri 460114, Nigeria)

Abstract

The paper appraised the nexus between electricity consumption, agriculture, GDP, oil production, and carbon dioxide (CO 2 ) emissions in Nigeria using a decoupling approach. The result showed that agriculture, electricity, and GDP were predictive variables for CO 2 emissions in the Granger causality analysis. The relationship between GDP and CO 2 emissions also indicated that the amount of CO 2 released tends to rise as the economy’s output and industrial sectors grow, making GDP and CO 2 emissions increasingly relevant indicators as a driver of CO 2 emissions. Modern agriculture is reliant on large-scale use of fossil fuels and fertilizer production, as well as GHG emissions from crop and livestock production. However, increasing per capita real production can help to enhance quality of the environment, and speed up the uptake of renewable energy which can consequently help to ameliorate global warming. As a result of this study’s policy implications, policies in the agricultural sector that could combat CO 2 emissions, including deforestation, land clearing, fertilization with highly environmentally destructive chemicals, neglected integration of agroforestry, and social forestry practices, can help reduce CO 2 emissions in the agricultural sector. In addition, the study recommends that the financial markets’ monetary policy should regulate the GDP to charges to compensate for their various sectors’ contributions to CO 2 emissions. This investigation might help policymakers in Nigeria to define the CO 2 emission monetary and fiscal strategies. In addition, more alternative energy sources such as biofuels, hydropower, solar energy, and other renewable resources should be embraced in Nigeria as sustainable substitutes for fossil fuels.

Suggested Citation

  • Mathy Sane & Miroslav Hajek & Joseph Phiri & Jamilu Said Babangida & Chukwudi Nwaogu, 2022. "Application of Decoupling Approach to Evaluate Electricity Consumption, Agriculture, GDP, Crude Oil Production, and CO 2 Emission Nexus in Support of Economic Instrument in Nigeria," Sustainability, MDPI, vol. 14(6), pages 1-15, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:6:p:3226-:d:767590
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    References listed on IDEAS

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    1. Ma, Qiang & Liu, Xin & Wang, Wei-Guo & Xue, Jing, 2023. "Natural resources extraction and COP26 target: Evaluating the role of green finance," Resources Policy, Elsevier, vol. 82(C).

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