Abstract
This study examined the effect of financial development, fossil energy use, economic progress, and FDI on environmental pollution in Nigeria from 1981 – 2014 using the ARDL technique. The outcome of the bond test reveals the presence of a long-run association on the variables of the model. The short-run estimate shows that all the variables positively influence CO2. The result of the long-run analysis further indicates that financial progress, fossil fuel, and GDP accelerates the level of CO2 discharge. However, FDI does not explain environmental pollution in Nigeria. Hence, the study suggests that government and policymakers should formulate policies to improve financial development designed to mitigate CO2 discharge by giving directives to financial institutions that all credits allocation should be toward the purchase of low emission technologies and domestic appliances. In addition, environmentalists should enlighten citizens on the danger of environmental pollution and ways to reduce it through public lectures and seminars.
Highlights
The deteriorating condition of the global climate and high-temperature levels due to the excessive discharge of CO2 has become an issue of concern
The study investigates the influence of credit allocation on the CO2 explosion in Nigeria from 1981 to 2014 using the ARDL estimation technique
The findings from the short-run estimates reveal that financial progress, energy utilization, output growth, and FDI positively affect the CO2 discharge in Nigeria
Summary
The deteriorating condition of the global climate and high-temperature levels due to the excessive discharge of CO2 has become an issue of concern. It is documented that the level of CO2 has reached 36.7 billion metric tonnes and is increasing by almost 2 percent annually (IEA, 2016) This has translated to the increased temperature to a tune of more than 30 C within a decade that affects the world ecosystem (IPCC, 2018; Tiwari, 2011). The amount of credit allocated to the public was estimated to reach 186 billion dollars in 2000, while in 2014, the amount was increased to 197 billion dollars in Nigeria, indicating a nearly 40 percent rise in a decade (Mlachila et al, 2016). It is essential to emphasize that financial progress deteriorates environmental quality through the domestic purchase of high emission technologies and appliances Based on this view, it is important to note that most studies on environmental pollution are concentrated in an industrial and developed nation; very few are done in Africa, Nigeria. This study examines the effect of financial progress on the level of CO2 discharge in Nigeria
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