Environmental Quality and Economic Growth in Nigeria

Abstract

This study examined the relationship between environmental quality and economic growth in Nigeria from 1990 to 2025. Specifically, it investigated the effects of carbon dioxide emissions, gas flaring, deforestation, and renewable energy consumption on economic growth. Secondary data were obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin, World Bank World Development Indicators (WDI), and National Bureau of Statistics (NBS). Descriptive statistics, the Augmented Dickey-Fuller (ADF) unit root test, and the Autoregressive Distributed Lag (ARDL) model were employed to analyze both short-run and long-run relationships among the variables. The unit root test indicated that the variables were integrated at mixed orders, I(0) and I(1), validating the use of the ARDL approach. The ARDL bounds test produced an F-statistic of 7.814, which exceeded the upper critical bound, confirming the existence of a long-run relationship among the variables. Long-run estimates revealed that carbon dioxide emissions (β = -0.284, p < 0.05), gas flaring (β = -0.196, p < 0.05), and deforestation (β = -0.145, p < 0.05) negatively affected economic growth, while renewable energy consumption (β = 0.372, p < 0.05) exerted a positive influence. The Error Correction Model (ECM) result showed a coefficient of -0.673, indicating that approximately 67% of short-run disequilibrium adjusts annually toward long-run equilibrium. The study concluded that environmental degradation poses a major challenge to sustainable economic growth in Nigeria, whereas renewable energy promotes economic sustainability. It therefore recommended stricter environmental regulations, reduced gas flaring, increased investment in renewable energy, and the implementation of sustainable environmental management policies.