Energy Consumption, CO2 Emission, and Economic Growth Nexus inNigeria

Energy consumption facilitates economic growth but it is a major source of carbonemission, leading to the dilemma in policy priority between economic growth and pollution reduction. Therefore, this study empirically examined the relationship between energy consumption, carbonemissions and economic growth in Nigeria using cointegration and dynamic causality analysis, with annual time series data for the period 1981 to 2021. A good number of econometrictechniques were conducted, which include; descriptive statistics, correlation coef icient, unit roottest, granger causality test, optimal lag selection criteria test and co-integration test usingAutoregressive Distribution Lag (ARDL) Bound Test and ARDL model Approach. Granger long-run dynamic analysis were conducted using error correction model (ECM) framework toexplorethe causal relationships between the variables. The study revealed evidence of relationshipbetween energy use, electricity consumption, CO2 emission and economic growth in Nigeria. Apositive but insignificant relationship exist between energy use and economic growth, electricityconsumption and economic growth, while a negative and insignificant relationship betweenCO2emission and economic growth in the long-run during the study period. During the laggedperiod, CO2 emission and economic growth showed positive and significant relationship in the long-run. The study also revealed that a unidirectional causality exists from economic growth to energyuse, electricity consumption to economic growth in the long run, while a bidirectional long-runcausality exists between CO2 emission and economic growth. An important policy implicationisthat energy consumption has positive influence on economic growth in Nigeria, thus as higherenergy consumption also means higher pollution in the long-run, policymakers shoulddiversifyand explore alternative energy sources for meeting up the increasing energy demand andreducingthe ef ect of carbon on her citizens.