Renewable energy, international trade, carbon dioxide emissions, and economic growth in Nigeria

Abstract

The study investigates the impact of renewable energy, international trade, foreign direct investments (FDI), and carbon dioxide emissions on gross domestic product growth (GDPG) by adopting the autoregressive distributed lag approach, error correction method, and Toda- Yamamoto approaches to determine the long-term relationship, short-term relationship, and direction of causality for the period 1984 to 2018 in Nigeria. The results of the study show the existence of a long-term and short-term relationship among the variables. The study found positive relationships between GDPG, international trade and carbon dioxide emissions. The Toda-Yamamoto tests also found a unidirectional causality from gross domestic growth to international trade and carbon dioxide emissions. On the other hand, the GDPG has a positive and insignificant relationship with renewable energy and foreign direct investment in the long term and short term. The study also found no causality between FDI, GDPG, and renewable energy. Therefore, based on the findings, this study puts forward policy strategies that are likely to reduce emissions without reducing GDP growth in Nigeria and other developing countries.