Modeling the Growth Effects of Climate Change in Nigeria.

Abstract

This study empirically investigates the effect of climate change on economic growth in Nigeria due to the level of depletion experienced in the ozone layer and the activities of industrial sector in terms of their emissions to the environment using annual data between 1980 and 2017. The study utilizes the autoregressive distributed lag (ARDL) to evaluate the short run and long run impact of climate change (measured by annual average rainfall, forest depletion and carbon emission) on economic growth. The ARDL bounds test reveals that there exist a long run relationship between climate change and economic growth in Nigeria. In the short 
run, carbon emission and annual average rainfall have a significant positive relation with economic growth whereas forest depletion reported a significant negative impact on economic growth. Meanwhile, in the long-run, only forest depletion has an adverse effect on output growth while the statistical significance of carbon emission and annual average rainfall are not validated. Thus, the study suggests the use of bio-fuels and clean energy by subsidizing its use in the industrial sector in place of fossil fuels which adversely impacted the environment and depletes the ozone layers.