FDI, Economic performance and CO2 discharge in Nigeria

International Journal of Research and Scientific Innovation (IJRSI) | Volume VIII, Issue III, March 2021 | ISSN 2321–2705

FDI, Economic performance and CO₂ discharge in Nigeria

Ahmad Ahmad and Temitope J. Laniran
University of Bradford, United Kingdom

Abstract: This study investigates the link among critical macroeconomic factors and CO2 discharge in Nigeria from 1981 – 2017. In achieving this objective, the study adopted an emission model that incorporate FDI inflows, GDP per capita and trade for the period of study. Autoregressive distributive lag (ARDL) estimation technique was used for the model estimation. The result of the study shows that both FDI and economic performance have a positive on CO2from industries and non-industries short-run analysis. However, the long run estimates reveals an inverse relationship among FDI, economic performance and CO2 discharge from industries and non-industries. Hence, the study suggest that policymakers should upgrade polices that would continue enhancing environmental quality in the nation through facilitating the use of low emission energy and technology.

Keywords: CO2 emission, FDI, Economic growth, ARDL, Nigeria

I. INTRODUCTION

The main focus in determining the link among CO2 discharge and macro-economic factors is to allow policymakers in judging the influence of economic activities on the environment. The condition of environmental settings in the presence of economic activities is highly essential in Morden economy for viable development, given the climate change challenges the world is faced with today. The great existential threat to is the increased damage to the environment because of the release and accumulation of dangerous pollutants such as CO2 in the atmosphere from human economic activities among others. Economic variables such as FDI, trade and economic growth are often considered as major culprits leading to this result. For example, Abdouli, and Hammami, (2017) argued that FDI reduce the level of welfare when environment is deteriorated. This is done through the transmission of pollution from industrialized and developed economies to less developed nations where environmental laws are ineffective. However, Hassaballa (2013) argued that FDI increase the welfare as the environmental friendly technologies are used in both developed and emerging nations.

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