Energy Consumption as a Driver of Greenhouse Gas Emissions: Evidence from Nigeria

This study empirically explored the impact of energy consumption on greenhouse gas (GHG) emissions in Nigeria, with a focus on measuring the relationship's magnitude and policy implications for long-term development. The analysis, which ran from 1990 to 2024, used a multivariate framework that included total GHG emissions, oil product consumption (LOPC), natural gas consumption (LNGC), electricity consumption (LEDC), and urban population growth. The Seemingly Unrelated Regression (SUR) model was used in the analysis, along with Augmented Dickey-Fuller (ADF) unit root testing, Bounds Cointegration testing, and the Toda-Yamamoto Granger causality approach, to establish stationarity, long-run equilibrium, and causal dynamics among the variables. The empirical results showed that oil and electricity consumption had a considerable and favourable impact on GHG emissions. Specifically, a 1% increase in domestic oil and electricity use resulted in 0.19% and 0.08% increases in GHG emissions, respectively. In contrast, natural gas usage had a statistically insignificant effect, most likely due to methane leakage and flaring inefficiency. Urbanisation had a substantial negative influence on emissions (-0.07%), indicating increased efficiency and lower emissions per capita in urban areas. The cointegration test demonstrated a stable long-run equilibrium, however Granger causality tests revealed that fossil fuel consumption drives emissions, supporting the Environmental Kuznets Curve (EKC) theory. These findings suggest that Nigeria's fossil fuel-based energy structure poses a significant threat to climate sustainability. Policy ideas include increasing renewable energy investment, implementing carbon price mechanisms, and improving regulatory oversight of emissions. The study stated that, while energy access is critical for economic growth, a shift to low-carbon energy sources is required to manage climate risks and line with Nigeria's Nationally Determined Contributions (NDCs) under the Paris Agreement.