Oil Sector and Carbon Emissions in Nigeria: Asymmetry Analysis

Abstract

The paper investigates the asymmetric effects of the oil sector on carbon emissions per capita in Nigeria through nonlinear autoregressive distributed lag estimations from 1980 to 2020 on yearly data. We consider the oil sector because of the country’s high dependence on it. Our results confirm that changes in the oil sector and carbon emissions are asymmetrically associated in both the short and long run. Moreover, the results show that both positive and negative changes in the oil sector lead to a reduction in carbon emissions, but positive shocks have a more profound effect. The results have important policy implications namely expanding the oil sector with strict enforcement of all environmental regulations will reduce carbon emissions. Moreover, an increase in oil prices in the short run will reduce carbon emissions, Finally, carbon emissions from the non-oil sector need to be regulated.