Impact of Oil Exports on Carbon Dioxide Emission in Nigeria

Abstract

The study empirically investigated the impact of oil exportation on carbon dioxide emission in Nigeria covering the period 1980 to 2020.The study employed preliminary test of Augmented Dickey Fuller and Dickey-Fuller GLS unit root testing procedure while the main estimation technique is the Autoregressive Distributed Lag (ARDL). Data for the study is sourced from the World Bank’s development indicators and Central Bank of Nigeria statistical bulletin for various years. The dependent variable is carbon dioxide emission (CO2) while explanatory variables includes, oil export (X), gross domestic product (Y) for economic growth, total factor productivity (TFP) for technological progress and innovation, oil price (OP) and nominal exchange rate (EXR). Findings in the study show that the coefficient of oil export exhibit positive effect on carbon dioxide emission but only significant in the short run at 10percent level. The study concludes that the positive value of oil export poses serious environmental threat given the rise in carbon dioxide emission. The study therefore, recommends amongst others that the policymakers particularly the Nigerian government need to diversify the economy from oil-based to non-oil based, which will go a long way in reducing environmental challenge emanating from crude oil production for export. The government should also use the proceeds from oil export to put in place necessary infrastructural facilities that can facilitates production process for both government and private sector activities.