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Fuel subsidies and Carbon Emission: Evidence from asymmetric modelling

Author

Listed:
  • Ibrahim A. Adekunle

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

  • Isiaq O. Oseni

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

Abstract

It is expected that fuel subsidy removal should hinder carbon emissions growth through low energy consumption channels amid higher energy prices. However, outliers in this theoretical disposition make empirical proof of the fuel subsidy-carbon intensity apt and primitive. Despite established fuel subsidy abolishment gains for climate and economic welfare, the relevance, magnitude and policy implications remain dimly. This paper employs the non-linear autoregressive distributed lag (NARDL) estimation procedure to gauge the contemporaneous influence of fuel subsidy for carbon intensity in Nigeria. Findings revealed that fuel subsidy removal inversely relates to Nigeria's carbon emission in the short-run and long run. The study recommends complementary policy option that ensures additional financial savings to the government should be invested in public sector growth that can cushion the effect of relative income loss to the citizenry. The Nigerian government should ensure measures are kept in place to discourage over-consumption of alternative energy (for example, coal) that could also threaten the green economy paradox.

Suggested Citation

  • Ibrahim A. Adekunle & Isiaq O. Oseni, 2021. "Fuel subsidies and Carbon Emission: Evidence from asymmetric modelling," Working Papers of the African Governance and Development Institute. 21/001, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:21/001
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ibrahim A. Adekunle & Olukayode E. Maku & Tolulope O. Williams & Judith Gbagidi & Emmanuel O. Ajike, 2023. "Natural Resource Endowments and Growth Dynamics in Africa: Evidence from Panel Cointegrating Regression," Working Papers 23/015, European Xtramile Centre of African Studies (EXCAS).
    2. Ozili, Peterson K, 2023. "Implications of fuel subsidy removal on the Nigerian economy," MPRA Paper 118798, University Library of Munich, Germany.
    3. Zheng Liu & Wenzhuo Sun, 2023. "Study on Low-Carbon Technology Investment Strategies for High Energy-Consuming Enterprises under the Health Co-Benefits of Carbon Emission Reduction," Sustainability, MDPI, vol. 15(11), pages 1-22, May.
    4. Kelly Bruin & Aykut Mert Yakut, 2023. "The Impacts of Removing Fossil Fuel Subsidies and Increasing Carbon Taxation in Ireland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(3), pages 741-782, August.
    5. Dr. AKINOLA Emmanuel Taiwo & Dr. AKINTUNDE Samuel Akinrinola & Dr. AKINTUNDE-ADEYI, Julianah Funmilayo & BADEMOSI Seyifunmi Damilola & ABDUSSALAAM Lolade Bashir, 2024. "Effects of Fuel Subsidy Removal on Small and Medium Enterprises Growth and Development in Nigeria: Case of Block Making Industries," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(6), pages 1245-1258, June.
    6. Wang, Xiaofei & Xu, Lirong & Gao, Qin & Liu, Nan & Wang, Chongmei & Li, Ke, 2025. "Effect of consumer subsidies on coal mine efficiency and its transmission mechanism," Energy Policy, Elsevier, vol. 196(C).
    7. Ibrahim A. Adekunle & Olukayode E. Maku & Tolulope O. Williams & Judith Gbagidi & Emmanuel O. Ajike, 2023. "Natural Resource Endowments and Growth Dynamics in Africa: Evidence from Panel Cointegrating Regression," Working Papers of the African Governance and Development Institute. 23/015, African Governance and Development Institute..

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    Keywords

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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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