Crude Oil Exports and Imports and Carbon Dioxide Emission in Nigeria

Abstract

The study investigated the impact of crude oil imports and exports on carbon dioxide emission in Nigeria from 1980 to 2020.The study employed ADF and Dickey-Fuller GLS unit root testing procedure and the Autoregressive Distributed Lag (ARDL) and granger causality test for analysis. Data for the study is sourced from the World Bank’s development indicators and CBN statistical bulletin for various years. The dependent variable is carbon dioxide emission (CO2) while explanatory variables includes oil import (M), oil export (X), gross domestic product (Y) for economic growth, total factor productivity (TFP) for technological progress and innovation, oil price (OP) and nominal exchange rate (EXR). Findings in the study show; First, the contribution of oil import to carbon dioxide emission is positively signed and statistically significant at 5percent level in both long run and short run. Secondly, the coefficient of oil export exhibit positive effect on carbon dioxide emission but only significant in the short run at 10percent level. Thirdly, there exist a unidirectional causation between oil import, oil export on carbon dioxide emission but not vice versa. The study concludes that the positive values of oil import and oil export pose serious environmental threat given the rise in carbon dioxide emission. The study therefore, recommends that the policymakers particularly the Nigerian government need to diversify the economy from oil-based to non-oil based, which will go a long way in reducing environmental challenges emanating from crude oil production.