The Effect of Natural Gas Utilization and CO2 Emissions on the Economic Growth of Nigeria

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 1

Year of Publication : 2020

Authors : Nnaemeka E. Ezenwa , Victor O. Nwatu

10.14445/23939125/IJEMS-V7I1P124

How to Cite?

Nnaemeka E. Ezenwa , Victor O. Nwatu, "The Effect of Natural Gas Utilization and CO2 Emissions on the Economic Growth of Nigeria," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 1, pp. 185-190, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I1P124

Abstract:

The paper examines the causality and co-integration relationship between natural gas utilization, CO2 per capita emissions, and economic growth in Nigeria from 1981 to 2015 using the granger causality technique and autoregressive distributive lag (ARDL) approach. Granger causality test results show the bi-directional casualty between GDP per capita and CO2 emissions. Also, casualty between natural gas utilization and GDP per capita is bi-directional. However, causality for natural gas utilization and CO2 emissions is unidirectional, where natural gas causes CO2 emissions. The co-integration test suggests a long-run relationship among natural gas utilization, CO2 emissions, and GDP per capita. We find that for both the long-run and short-run ARDL model decrease in CO2 emissions will encourage economic growth. In the shortrun, an increase in natural gas utilization supports economic growth.

Keywords:

CO2, Natural Gas, GDP per capita, Causality, ARDL.

References:

[1] Abimelech, G. P., Zhen, W., Presley, W., & Isaac, R. Y., The impacts of oil price shocks on small oil-importing economies: Times series evidence for Liberia. Energy, (2017) 975-990.
[2] Alkhathlan, K., & Javid, M., Energy consumption, carbon emissions and economic growth in Saudi Arabia: An aggregate and disaggregate analysis. Energy Policy, (2013)1525-1532.
[3] Aydin, M., Natural gas consumption and economic growth nexus for top 10 natural Gas–Consuming countries: A Granger causality analysis in the frequency domain. Energy, 165(2018) 179-186.
[4] Bowden, N., & Payne, J. E., The causal relationship between U.S. energy consumption and real output: A disaggregated analysis. Journal of Policy Modeling, 31(2) (2009) 180-188.
[5] Edenhofer, O., Pichs-Madruga, R., & Sokona, Y.,Climate Change 2014 Mitigation of Climate Change. Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press(2014).
[6] EIA.,eia Beta(2019). Retrieved (2019), from International EnergyStatistics. https://www.eia.gov/beta/international/data/browser/#/?pa=0000000g&c=00000000000000000000000000000004&ct=0&tl_id=3002-A&vs=INTL.26-2-NGA-BCF.A&vo=0&v=H&end=2017
[7] Gambo, S. L., Binti, S. I., Ismail, N. W., & Idris, M. M., Energy Consumption, Environmental Emissions, and Economic Growth: An Empirical Analysis in Nigeria. Journal Of Humanities And Social Science (2279-0837) (2018) 11-22.
[8] Ilhan, O., & Ali, A., CO2 emissions, energy consumption, and economic growth in Turkey. Renewable and Sustainable energy reviews, 14(9) (2010) 3220-3225.
[9] Jahangir, S., & Dural, B., Crude oil, natural gas, and economic growth: impact and causality analysis in Caspian Sea region. International Journal of Management and Economics, 54(3) (2018) 169-184.
[10] Khan, M. A., Khan, M. Z., Zaman, K., & Khan, M. M., Causal links between greenhouse gas emissions, economic growth, and energy consumption in Pakistan: A fatal disorder of society. Renewable and sustainable energy reviews, (2013)1364-0321.
[11] Lawal, G. O., & Aweda, N. O., An Application of ARDL Bounds Testing Procedure to the Estimation of Level Relationship between Exchange Rate, Crude Oil Price and Inflation Rate in Nigeria. Internation Journal of Statistics and Applications, 5(2) (2015) 81-90.
[12] Our World in Data.,CO2 and other GreenHouse Emissions(2017). Retrieved February 25, 2019, from Our World in Data: https://ourworldindata.org/co2-and-other-greenhouse-gas-emissions
[13] Shahbbaz, M., Lean, H. H., & Farooq, A., Natural Gas Consumption and Economic Growth in Pakistan. 18(1) (2012) 87-94.
[14] The World Bank. GDP per capita (constant LCU)(2019). Retrieved February 18, 2019, from The Workd Bank: https://data.worldbank.org/indicator/NY.GDP.PCAP.KN?locations=NG
[15] Tsangyao, C., Rangan , G., & Roula, I.-l., The causal relationship between natural gas consumption and economic growth: evidence from the G7 countries. Journal of Applied Economics Letter,(2015) 38-46.
[16] UNFCC.,Kyoto Protocol Reference Manual.United Nations Framework Convention on Climate Change (UNFCCC),(2008) 1-130.