The Environmental Impact of Energy Consumption in Nigeria: Evidence from CO2 Emissions

The consumption of energy to achieve e conomic growth has immensely impacted Nigeria’s environment through its 13 influence on CO 2 emissions. The paper employed Vector Error Correction Model (VECM) to analyzed the 14 environmental impact of energy consumption in Nigeria using time series data from 1990-2018. Our study found a 15 long run positive impact of GDP on CO2 emissions in Nigeria. This refute the Environmental Kuznet Curve hypothesis 16 that environmental quality improved with an increase in income. We also found that charcoal consumption has a long 17 run tendency of reducing CO 2 emission while fuel wood consumption has a long run possibility of raising CO2 18 emission. We also found that usage of gas oil has a negative impact on CO 2 emissions while natural gas consumption 19 and fuel oil consumption has a detrimental impact on CO 2 emission. Hydroelectricity consumption on the other has a 20 long run negative impact on CO 2 emission in Nigeria. However, we suggested for investment in hydroelectricity and 21 wood biomass energy consumption that can minimize the potential environmental damage in Nigeria. Because 22 hydroelectricity and biomass energy can substitute fossil fuel energy in the production of goods and services which 23 can also help to mitigate CO 2 emissions and improve the environmental quality of the country.

sources of energy in Nigeria are natural gas, oil and biomass (Federal Republic of Nigeria, 2018). Report show that 39 the bioenergy share in 2020 is more than 80% of the total primary energy (Federal Republic of Nigeria, 2018).

40
However, unfortunately, only about half of Nigeria's population has connections to grid-connected power. This is 41 because the electric power supply in the country is insufficient and has limited industrial growth and development.

42
For instance, the 2015 power supply averaged 3.1 gigawatts, an amount estimated to be a third demand (Federal 43 Republic of Nigeria, 2018).

57
However, the relationships between energy, pollution and economic development thus have important policy 58 consequences for any country's economic landscape. This is because economic development requires various 59 quantities and forms of resources, like energy use. Thus, if CO2 emission rate varies through various resource 60 production and energy sources, the energy use and other resource production to achieve economic development 61 ultimately adds to environmental quality. Energy consumption, mainly fossil fuel energy contributes to CO2 emissions 62 which is among the cause of climate change and global warming. Therefore, it was in line with this that the 63 International Energy Agency (2018) suggested that any efforts to reduce CO2 emissions in a country effectively, a 64 strategic plan of the energy and economic sectors should be applied. The agency categorized energy users and reduce the citizen's risks of exposure to various health hazards. Thus, this study seek to explore the environmental 85 impact of energy consumption in Nigeria, evidence from CO2 emissions.

86
The remaining parts of this research are organized as follows: section 2 review the related literatures while 87 section 3 describes the materials and methods. Section 4 contains results and discussions, and section 5 presents the 88 conclusion. Section 6 present recommendations and policy implications of the paper respectively.

90
The linkage between economic growth and CO2 emissions has been examined by several researchers. For 91 instance, Shahbaz et al. (2013) and Saboori and Sulaiman (2013) found a two-way relationship between GDP per

105
Alkhathlan and Javid (2013), Saboori and Sulaiman (2013), Alam et al. (2016), Rafindadi (2016), Omri (2016) 106 modeled the ties between economic development, energy use and emissions in the same context. These studies 107 consider CO2 emissions as a function of income, income squared, and income cubed in addition to other explanatory 108 variables such as energy use; thus, the model suffered from collinearity problems. Therefore, our study is an attempt 109 to fill the gap by introducing new variables such as fuel consumption, natural gas consumption, gas oil consumption, 110 fuel wood consumption, hydroelectricity consumption etc. besides economic indicators such as GDP per capita. This 111 is in order to solve the problem of omitted variables and misspecification of model.

112
Therefore, compared to previous research, our study has three significant contributions. First, beside the 113 commonly used variables such as GDP per capita, this study considered energy consumption variables (such as natural 114 gas consumption, fuel wood consumption, fuel consumption, charcoal consumption, and hydroelectricity 115 consumption) as socioeconomic drivers of CO2 emissions in Nigeria; this could provide exciting policy option to 116 mitigate CO2 emissions which has severe environmental impact. Second, unlike the other studies, this study employed 117 Vector Error Correction model to investigate the environmental impact of energy consumption in Nigeria. The result 118 from VECM will give an interesting direction to the policy makers not only in devising national policy related to 119 energy consumption but also in developing and promoting a sustainable economic environment in the country.

120
Thirdly, the relation between CO2 emissions and economic growth in the energy demand system is explored to help such as fuel oil consumption, natural gas consumption and gas oil consumption are included in the model. While other 129 energy used in this paper is hydroelectricity as well as fuel wood and charcoal as other energy sources. All variables 130 are in total energy consumption. Thus, the present study employed Vector Error Correction Model (VECM) to analyze 131 the environmental impact of energy consumption in Nigeria. The data for the study were sourced from African 132 Development Bank (2019)

148
varying variance or both. This also ensures that every variable has a constant mean-variance. This will make the 149 prediction of future value sensible and meaningful. Therefore, if a variable is non-stationary at level, the data will be 150 differenced. The researcher will expose the research data to a stationary test based on the Augmented Dickey Fuller 151 test.

152
The test will be based on the following general model for the ADF unit root framework:

177
= coefficient of the ECT and the speed at which Y returns to equilibrium after changes in X and R.

178
The specific VECM for this studies are as follows: The rationale behind adopting this model is that empirical studies have shown that the VECM is best suited for model 204 estimation when economic variables are individually cointegrated, i.e., when there is an excellent long-run relationship 205 between them. Another advantage is that it combines both the short-run dynamic and long-run equilibrium models in 206 a simplified and unified system. At the same time, it guarantees conceptual rigor, accuracy and integrity of data.

208
The minimum total emitted CO2 is 68,581 metric tons per capita and the maximum emitted CO2 is 106,124 209 metric tons per capita. The average CO2 emission was 90,738.35 metric tons per capita (Table I) (Table I).

215
The average fuel oil consumption in Nigeria annually was 2,025.385 metric tons according to our findings 216 (Table I). Also, the country consumed a maximum of 1,660,131 terajoules of Natural gas, including LNG and a 217 minimum of 152,000 terajoules. The average production of natural gas in Nigeria was 766,348.1 terajoules (Table I).

218
On the other hand, the production of gas oil/diesel oil reaches a maximum of 2,604 thousand metric tons with the    (Table II), all the variables are The result show that charcoal consumption has a significant possibility of reducing total CO2 emissions in 247 the long-run. The reason is as a result technological improvement in the country manufacturing and construction sector 248 and the change in the method of cooking in the residential buildings in the cities. While fuel wood consumption has a 249 long-run possibility of rising the total CO2 emissions. This is because fuel wood is the primary energy used for cooking 250 and heating by the majority of Nigerian population, especially in rural areas and the current rate of fuel wood 251 consumption in Nigeria has a potential of reducing environmental quality in the future. This has put more threat to 252 Nigeria's environment. Similar study also found that emissions were entirely from degradation and loss of forest land 253 (FOASTAT, 2018). This finding refutes Sulaiman et al. (2020) findings which argued that CO2 emissions declined 254 with an increased in wood biomass consumption.

255
Furthermore, gas oil consumption has a significant possibility of reducing total CO2 emissions in the long-256 run. This is because recently houses and residential buildings in Nigeria especially rural areas often use gas oil to help 257 in setting fire for cooking, local lightning and heating, especially during the rainy season. Therefore, as a result of this, 258 the level of emitted CO2 in our buildings contributed in reducing the level of environmental quality in the country.

259
The study finding accord with a recent study by Dong, K. et al. (2017) that gas consumption reduces CO2 emissions 260 but refutes the report by IEA (2018) that residential, commercial and private services were among the energy users 261 and producers of CO2 emissions from energy combustion as well as the reports by UNDP (2010) that most of the 262 carbon emission is known to come from the production and consumption of non-renewable oil and gas.

263
The result also show that natural gas consumption has a significant positive effect on total CO2 emissions.

264
This signifies that an increase in natural gas consumption has a possibility of rising Nigerian total CO2 emissions in 265 the future. Also, the implication of the finding is that increasing consumption of natural gas has the potential of 266 threatening Nigeria's effort to meet the global goal for O2 emission reduction as outlined in the 2015 Paris Climate 267 Change Conference. This findings refutes the hypothesis that even though refining of natural gas increases CO2 268 emissions, it produces 50% less carbon into the atmosphere than other fossil fuels such as coal and petroleum.
long-run potentials of growth, development and sustainability. This is because the implication of long-run impact of 293 shifting to renewable energy resources in Nigeria is zero emissions economy, health costs reduction by lowering 294 environmental pollution and climate change mitigation. Nigeria's fossil fuel-based economy will depleted one day 295 and therefore, the need for capital investment in searching for alternatives earlier is of utmost importance because in 296 the long-run, Nigeria needs more carbon space to meet the global standard for developmental needs.

320
Furthermore, while striving to mitigate the environmental problems by promoting hydroelectricity and 321 biomass energy, it is essential to note that cleaner economic growth with good environmental quality should be 322 compromised. This is because the source of hydroelectricity is water and the source of wood biomass is trees which 323 if unsustainably used and harvested can cause environmental degradation due to forest destruction, which can harm 324 the economic environment of Nigeria. Therefore, the study suggest for the improvement in Nigeria's environment 325 through reduction in deforestation as well as strengthening the environmental policy of the country. This can guarantee 326 a cleaner and safe economic environment in Nigeria.

327
Also, the need for robust policy implementation by the concerned authorities must be pursued in order to 328 promote and improve the environmental quality that can suit the growth of the economy without trading off the future 329 fate of Nigeria's environment generation. Therefore, the need for energy development program that can reduce the 330 massive dependence on fossil fuels such as oil and shift to more cleaner and renewable energy is necessary. The 331 government should also invest more on technology for promoting the development of new energy resources and 332 renewable energy sources since Nigeria has enough quantities of untapped renewable energy. However, to reduce the 333 reliance on fossil fuel consumption and wean from an oil-based economy, the Nigeria must create incentives to the

352
The authors declare that they have no known competing financial interests or personal relationships that could have 353 appeared to influence the work reported in this paper.

355
The data will be available on request 356 357