CO2 Emission

Energy consumption facilitates economic growth but it is a major source of carbon emission, leading to the dilemma in policy priority between economic growth and pollution reduction. Therefore, this study empirically examined the relationship between energy consumption, carbon emissions 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 econometric techniques were conducted, which include; descriptive statistics, correlation coefficient, unit root test, granger causality test, optimal lag selection criteria test and co-integration test using Autoregressive Distribution Lag (ARDL) Bound Test and ARDL model Approach. Granger long- run dynamic analysis were conducted using error correction model (ECM) framework to explore the causal relationships between the variables. The study revealed evidence of relationship between energy use, electricity consumption, CO2 emission and economic growth in Nigeria. A positive but insignificant relationship exist between energy use and economic growth, electricity consumption and economic growth, while a negative and insignificant relationship between CO2 emission and economic growth in the long-run during the study period. During the lagged period, 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 energy use, electricity consumption to economic growth in the long run, while a bidirectional long-run causality exists between CO2 emission and economic growth. An important policy implication is that energy consumption has positive influence on economic growth in Nigeria, thus as higher energy consumption also means higher pollution in the long-run, policymakers should diversify and explore alternative energy sources for meeting up the increasing energy demand and reducing the effect of carbon on her citizens.