Economic growth and environmental sustainability: assessing the validity of the environmental Kuznets curve in Nigeria
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Date
2024
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Department of Economics, University of Nigeria, Nsukka, Enugu State
Abstract
The environmental Kuznets curve (EKC) hypothesis explores the relationship between economic growth and environmental quality, suggesting that environmental degradation initially worsens with economic growth but improves after reaching a specific income threshold. While evidence supporting the EKC exists for some pollutants and countries, results remain mixed for Nigeria. This study therefore reexamines the EKC hypothesis for Nigeria, focusing on key environmental degradation indicators: CO2 emissions, fossil fuel consumption, resource depletion, and erosion. Specifically, it investigates whether an EKC relationship exists between these indicators and GDP growth. The study also determine Nigeria’s growth threshold, above which economic growth benefits the environment. Using time-series data from 1981 to 2023 sourced from the World Bank’s World Development Indicators, the study employed threshold regression analysis to evaluate the validity of EKC hypothesis. The results reveal mixed alignment with the EKC hypothesis. While some indicators of environmental degradation validate the EKC hypothesis, others refute it. This study, therefore, concludes that economic growth impacts only some aspects or components of environmental degradation. Accordingly, policy measures such as adoption of green technologies, promotion of renewable energy, and enforcement of stricter environmental regulations are recommended in order to achieve sustainable economic growth. Adopting these measures would reduce pollution, conserve natural resources, and mitigate climate change, fostering a balance between economic growth and environmental sustainability.