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Environmental quality and financial development revisited in the case of Nigeria: a counterfactual simulation approach

Author

Listed:
  • Kingsley Ikechukwu Okere
  • Obumneke Bob Muoneke
  • Maxwell Onyemachi Ogbulu
  • Izuchukwu Ogbodo

Abstract

This study examines the effect of bank credit to the private sector on environmental quality (carbon emissions and carbon emission intensity) in Nigeria from 1971-2017 adopting novel dynamic ARDL simulations within framework of Stochastic Impact by Regression on Population, Affluence and Technology (STRIPAT). Controlling for the impact of fossil fuel energy use and economic globalisation (de jure), findings of the study showed that financial development exerts a direct and significant long-run rising influence on both carbon emissions and carbon emission intensity in Nigeria. Fossil energy intensity use, population and economic globalisation have a long-run and short-run positive effect on aggregate CO2 emission and carbon emission intensity in Nigeria. In all, the findings imply that Nigeria is yet to transit to renewable energy.

Suggested Citation

  • Kingsley Ikechukwu Okere & Obumneke Bob Muoneke & Maxwell Onyemachi Ogbulu & Izuchukwu Ogbodo, 2023. "Environmental quality and financial development revisited in the case of Nigeria: a counterfactual simulation approach," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 15(3), pages 384-414.
    • Handle: RePEc:ids:ijsuse:v:15:y:2023:i:3:p:384-414
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