MONETARY POLICY TRADE AND CARBON EMISSION INVESTIGATION IN NIGERIA
Osemwenkhae, O. and Uwubanmwen, A. E.
Volume 4 Issue 2
Abstract
The effect of monetary policy trade on carbon emission investigation in Nigeria is empirically examined in this study for the period 1981 to 2021 using descriptive statistics, correlation analysis, and Auto Regressive Distributed Lag (ARDL) technique. The various analyses were used to investigate the connection between monetary policy and carbon emission in Nigeria. The empirical findings showed that monetary policy variables (monetary policy rate, cash reserve ratio and money supply) as well as the control variables (exchange rate, inflation rate and energy consumption) had a no substantial impact on carbon emission in Nigeria. Based on these findings, the study recommends that monetary authorities should consider the environment when implementing monetary policy in Nigeria. For example, the Central Bank of Nigeria may incentivize investments in energy-efficient equipment by tailoring its monetary instruments towards activities that encourages low-carbon emission. Also, the government should come out with a clear policy to solving the climate related issue in Nigeria, coming up with such policy will encourage private businesses to do more in reducing carbon emission in Nigeria. Keywords: Auto Regressive Distributed Lag Method, Carbon Emission, Cash Reserve Ratio, Climate Change, Monetary Policy Rate
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