Do structural breaks matter in the growth-environment nexus in Nigeria?
This paper examined the nexus between energy consumption, CO2 emissions and economic growth in Nigeria, for the period 1970-2011 within a dynamic multivariate framework. Specifically, we rely on the Zivot-Andrews unit root test, Gregory-Hansen cointegration test and subsequently estimate our model using the Granger non-causality test (proposed by Toda and Yomamoto). Our findings showed that even with the observed break points in 1991 and 1992, energy consumption, CO2 emissions and economic growth were cointegrated. However, perhaps due to the structural shifts, no causal relationship running from CO2 emission and energy consumption to economic growth was observed. We also found that the effect of CO2 emissions and energy consumption on growth in Nigeria is time-varying between, before and after the structural breakpoint. An important policy implication resulting from our analysis is the need for government to re-focus its energy policies in pursuit of renewable energy sources that are environmentally friendly and which will have minimal effects on long-term growth in terms of CO2 emissions.
Volume (Year): 33 (2013)
Issue (Month): 4 ()
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