Impact of Refined Crude Oil Imports on Carbon Dioxide Emission (C02) in Nigeria

Abstract

Purpose: The study investigated the impact of refined crude oil imports on carbon dioxide emission in Nigeria covering the period 1980 to 2020. Methodology: 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 include refined oil imports (M), 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: Findings in the study show that the contribution of refined oil imports to carbon dioxide emission is positively signed and statistically significant at 5 percent level in both long run and short run. There exists a unidirectional causation between oil import, and carbon dioxide emission. The study concludes that the positive values of refined oil imports pose serious environmental threat given the rise in carbon dioxide emission. Unique Contribution to Theory, Policy and Practice: The study therefore, recommends amongst others that the policymakers particularly the Nigeria’s executive arm of government need to diversify the economy from oil-based to non-oil based. Also, the country’s refineries should be de-regulated to reduce the over dependency on the importation of the refined crude oil imports alongside with the establishment of Government Agencies that will strictly monitor the refined crude oil production process which will go a long way in reducing the over reliance on refined crude oil importation as well as the environmental challenges emanating from refined oil consumption.