A Time-Series Analysis Of Insurance Sector Density And Environmental Quality In Nigeria

Nigeria is a high-polluting country, hence, carbon emissions from diverse sources tend to affect the quality of the environment. However, a high density of insurance companies in an area can lead to better risk management practices, including incentivizing policyholders to adopt environmentally-friendly measures that reduce carbon emissions. As a result, the study uses the ARDL Bounds testing framework to look at how the density of the insurance business has affected environmental quality in Nigeria from 1990 to 2021. The ARDL technique is used to look at the relationship between the research variables across the short and long run. The study showed that insurance sector density energy and renewable energy consumption increase environmental quality in Nigeria by reducing CO2 emission. The study also demonstrated that Nigeria's expanding economy (in terms of trade and economic growth) increases CO2 emission, thus affecting the quality of the environment. As a result, Nigerian government authorities should keep supporting insurance sector reforms to improve environmental quality, and insurers should reward people and businesses that use renewable energy sources and discloses their carbon emission activities. Policymakers must develop plans to increase the usage of renewable energy sources. The impact of trade openness on CO2 emission in Nigeria must be kept to a minimum, thus policymakers must establish and continuously monitor a stringent environmental regulatory framework. Furthermore, economic growth reduces environmental quality in Nigeria, thus policies such as pollution control, waste management, resource conservation, and sustainable production practices which are geared towards strengthening and enforcing environmental regulations to mitigate the negative impacts of economic activities on the environment.