EFFECT OF CLIMATE CHANGE ON ECONOMIC GROWTH IN NIGERIA
AJAYI, Idowu Shola
Volume 10 Issue 1
Abstract
The study examined the effects of different components of climate change on economic growth in Nigeria. To achieve this objective, the growth accounting equation framework provided the basis for the models adopted. These models comprised 7 economic growth equations, where each of the five climate change measures and their combination is made to feature differently in the first 6 equations while the five measures are included simultaneously in the seventh equation. The study tested for stationarity of the variables through the ADF method and cointegration of the models through the ARDL Bounds testing approach. Based on the outcomes of these tests, the paper adopted the ARDL estimation method to derive the models’ long-run estimates that are reported and evaluated in the paper, after ensuring the validity of the estimates through appropriate diagnostic tests and necessary remedial econometric measures. The data, which covered 1991-2021 years for Nigeria, were sourced from the World Bank and IMF databases. Following the above methodology, the highlights of findings confirmed that each of the following 4 categories of climate change (viz: methane emissions, gaseous emissions, liquid emissions and aggregate emissions) has a negative effect on economic growth in Nigeria. The study therefore recommends that if climate change is mitigated by reducing the consumption of those components where it recorded a negative effect on economic growth, it would increase economic growth. Keywords: Climate Change, Cointegration, Growth Accounting, Economic Growth, Capital Stock Growth.
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