Energy Consumption, Economic Growth, and Environmental Quality in Nigeria: Evidence from a Threshold Regression Approach.

Nigeria’s economic growth is closely tied to its energy consumption, which remains heavily dependent on nonrenewable sources, particularly petroleum, to drive industrial and commercial activities. While this reliance has fueled economic growth and strengthened Nigeria’s position as a significant oil producer, it has simultaneously intensified environmental degradation. This study examines the interrelationships between energy consumption, economic growth, urbanization, and environmental quality in Nigeria using annual time series data from 1971 to 2020. Employing an autoregressive threshold (ART) testing approach, the analysis captures potential nonlinear dynamics among these variables. The results indicate that the initial phase of fossil fuel consumption contributes to slight improvements in environmental quality; however, long-run dependence on fossil energy significantly deteriorates ecological conditions through pollution and greenhouse gas emissions. The study highlights the urgent need for a structured transition toward renewable energy sources to improve environmental sustainability. Despite Nigeria’s low adoption of renewable technologies, the findings provide valuable insights for policymakers to promote clean energy and foster sustainable economic growth.

Energy consumption; Economic growth; Renewable energy

1. Abbass, K., Qasim, M. Z., Song, H., Murshed, M., Mahmood, H., & Younis, I. (2022). A review of the global climate change impacts, adaptation, and sustainable mitigation measures. Environmental Science and Pollution Research, 29(28), 42539-42559. [Google Scholar] [Crossref]

2. Abaidoo, R., & Agyapong, E. K. (2023). Environmental sustainability risk, institutional effectiveness and urbanization. Energy & Environment, 34(8), 3055-3079 [Google Scholar] [Crossref]

3. Adeniran, O. (2009). Does energy consumption cause economic growth? An empirical evidence from Nigeria. University of Dundee, UK. [Google Scholar] [Crossref]

4. Adewuyi, A. O., & Awodumi, O. B. (2020). Renewable and non-renewable energy–growth emissions linkages: Review and policy implications. Energy Policy, 137, 111090. [Google Scholar] [Crossref]

5. Adewuyi, A. O., Awodumi, O. B., & Omoke, P. C. (2023). Energy consumption thresholds and environmental degradation in sub-Saharan Africa. Environmental Science and Pollution Research, 30(12), 13472–13489. [Google Scholar] [Crossref]

6. Aiyetan, I. R., & Olomola, P. A. (2017). Environmental degradation, energy consumption, population growth and economic growth: does environmental Kuznets curve matter for Nigeria? Economic and Policy Review, 16(2). [Google Scholar] [Crossref]

7. Akpan, G. E., & Akpan, U. F. (2012). Electricity consumption, carbon emissions and economic growth in Nigeria. International Journal of Energy Economics and Policy, 2(4), 292-306. [Google Scholar] [Crossref]

8. Akorede, Y. F., & Afroz, R. (2020). The relationship between urbanization, CO2 emissions, economic growth and energy consumption in Nigeria. International Journal of Energy Economics and Policy, 10(6), 491-501. [Google Scholar] [Crossref]

9. Alola, A. A., Bekun, F. V., & Sarkodie, S. A. (2021). The dynamic nexus of renewable energy consumption, carbon emissions, and economic growth in Nigeria. Environmental Science and Pollution Research, 28(4), 4389–4400. [Google Scholar] [Crossref]

10. Alshehry, A. S., & Belloumi, M. (2015). Energy consumption, carbon dioxide emissions and economic growth: The case of Saudi Arabia. Renewable and Sustainable Energy Reviews, 41, 237-247. [Google Scholar] [Crossref]

11. Arent, D. J., Wise, A., & Gelman, R. (2011). The status and prospects of renewable energy for combating global warming. Energy Economics, 33(4), 584-593. [Google Scholar] [Crossref]

12. Atedhor, G. O. (2023). Greenhouse gases emissions and their reduction strategies: Perspectives of Africa's largest economy. Scientific African, 20, e01705. [Google Scholar] [Crossref]

13. Baek, J. (2016). Do nuclear and renewable energy improve the environment? Empirical evidence from the United States. Ecological indicators, 66, 352-356. [Google Scholar] [Crossref]

14. Bassongui, N., Nomo Alinga, D. N., & Mignamissi, D. (2021). Threshold effects of energy mix on environmental quality. Journal of Bioeconomics, 1-16. [Google Scholar] [Crossref]

15. Bello, M. O., Solarin, S. A., & Yen, Y. Y. (2021). Trade openness and environmental quality in sub-Saharan Africa: Role of governance and institutional quality. Environmental Science and Pollution Research, 28(30), 40887–40901. [Google Scholar] [Crossref]

16. Chuku, A. (2011). Economic development and environmental quality in Nigeria: is there an environmental Kuznets curve? [Google Scholar] [Crossref]

17. Danish, Baloch MA (2017) Dynamic linkages between road transport energy consumption, economic growth, and environmental quality: evidence from Pakistan. Environ Sci Pollut Res 25:1–12. [Google Scholar] [Crossref]

18. Dada, J. T., Ajide, F. M., Arnaut, M., & Adams, A. (2022). On the shadow economy-environmental sustainability nexus in Africa: the (ir)relevance of financial development. [Google Scholar] [Crossref]

19. International Journal of Sustainable Dogan, E., & Seker, F. (2016). Determinants of CO2 emissions in the European Union: the role of renewable and non-renewable energy. Renewable Energy, 94, 429-439. [Google Scholar] [Crossref]

20. Dantama, Y. U., Abdullahi, Y. Z., & Inuwa, N. (2012). Energy consumption-economic growth nexus in Nigeria: An empirical assessment based on ARDL bound test approach. European Scientific Journal, 8(12). [Google Scholar] [Crossref]

21. Dimnwobi, S. K., Ekesiobi, C., Madichie, C. V., & Asongu, S. A. (2021). Population dynamics and environmental quality in Africa. Science of the Total Environment, 797, 149172. [Google Scholar] [Crossref]

22. Economou, C., & World Health Organization. (2010). Greece: Health system review. [Google Scholar] [Crossref]

23. Gershon, O., Azubuike, S. I., & Asekomeh, A. (2022). Conclusion: Towards a Decarbonisation Framework for African Cities. In Decarbonisation Pathways for African Cities (pp. 179-185). Cham: Springer International Publishing. [Google Scholar] [Crossref]

24. Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement (No. w3914). National Bureau of Economic Research. [Google Scholar] [Crossref]

25. Grossman, G. M. and Krueger, A. B. (1993). Environmental Impacts of the North American Free Trade Agreement. The Mexico-U.S. Free Trade Agreement, edited by P. Garber. Cambridge, MA: MIT Press. [Google Scholar] [Crossref]

26. Ibrahim, M. H., & Law, S.H. (2012). Institutional quality and CO2 emission—Trade relations: Evidence from SubSaharan Africa. S. Afr. J. Econ. 2016, 84, 323–340. [Google Scholar] [Crossref]

27. Kahia, M., Aïssa, M. S. B., & Lanouar, C. (2017). Renewable and non-renewable energy use-economic growth nexus: The case of MENA Net Oil Importing Countries. Renewable and Sustainable Energy Reviews, 71, 127-140. [Google Scholar] [Crossref]

28. Keleş, S., & Bilgen, S. (2012). Renewable energy sources in Turkey for climate change mitigation and energy sustainability. Renewable and Sustainable Energy Reviews, 16(7), 5199-5206. [Google Scholar] [Crossref]

29. Keramidas, K., Diaz Vazquez, A., Weitzel, M., Vandyck, T., Tamba, M., Tchung-Ming, S., ... & Wen, X. (2020). Global Energy and Climate Outlook 2019: Electrification for the low-carbon transition. Publications Office of the European Union, Joint Research Center: Luxembourg. [Google Scholar] [Crossref]

30. Khan, S. A. R., Yu, Z., Belhadi, A., & Mardani, A. (2020). Investigating the effects of renewable energy on international trade and environmental quality. Journal of Environmental management, 272, 111089. [Google Scholar] [Crossref]

31. Kounetas, K. E. (2018). Energy consumption and CO2 emissions convergence in European Union member countries. A tonneau des Danaides?. Energy Economics, 69, 111-127. [Google Scholar] [Crossref]

32. Madni, G. R., & Wu, Q. (2021). Environmental protection in selected one belt one road economies through institutional quality: Prospering transportation and industrialization. PLoS ONE 16(1): e0240851. [Google Scholar] [Crossref]

33. Magazzino, C. (2017). Economic growth, CO2 emissions and energy use in the South Caucasus and Turkey: a PVAR analyses, Int. Energy J. 16 (4) . [Google Scholar] [Crossref]

34. Magazzino, C., Mutascu, M., Mele, M., & Sarkodie, S. A. (2021). Energy consumption and economic growth in Italy: A wavelet analysis. Energy Reports, 7, 1520-1528. [Google Scholar] [Crossref]

35. Magazzino, C., Mele, M., Drago, C., Kuşkaya, S., Pozzi, C., & Monarca, U. (2023). The trilemma among CO2 emissions, energy use, and economic growth in Russia. Scientific Reports, 13(1), 10225. [Google Scholar] [Crossref]

36. Maji, I. K., Sulaiman, C., & Abdul-Rahim, A. S. (2019). Renewable energy consumption and economic growth nexus: A fresh evidence from West Africa. Energy Reports, 5, 384-392., [Google Scholar] [Crossref]

37. Mirza, F. M., & Kanwal, A. (2017). Energy consumption, carbon emissions and economic growth in Pakistan: Dynamic causality analysis. Renewable and Sustainable Energy Reviews, 72, 1233-1240. [Google Scholar] [Crossref]

38. Muazu, A., Yu, Q., & Alariqi, M. (2023). The impact of renewable energy consumption and economic growth on environmental quality in Africa: A threshold regression analysis. Energies, 16(11), 4533. [Google Scholar] [Crossref]

39. Narayan, P. K. (2005). The saving and investment nexus for China: evidence from cointegration tests. Applied Economics, 37(17), 1979–1990. [Google Scholar] [Crossref]

40. Nathaniel, S. P., & Bekun, F. V. (2021). Electricity consumption, urbanization, and economic growth in Nigeria: New insights from combined cointegration amidst structural breaks. Journal of Public Affairs, 21(1), e2102. [Google Scholar] [Crossref]

41. Nathaniel, S. P., & Iheonu, C. O. (2019). Carbon dioxide abatement in Africa: The role of renewable and non-renewable energy consumption. Science of the Total Environment, 679, 337–345. [Google Scholar] [Crossref]

42. Nathaniel, S., Nwodo, O., Adediran, A., Sharma, G., Shah, M., & Adeleye, N. (2019). Ecological footprint, urbanization, and energy consumption in South Africa: including the excluded. Environmental Science and Pollution Research, 26(26), 27168-27179. [Google Scholar] [Crossref]

43. Neagu, O., & Teodoru, M. C. (2019). The relationship between economic complexity, energy consumption structure and greenhouse gas emission: Heterogeneous panel evidence from the EU countries. Sustainability, 11(2), 497. [Google Scholar] [Crossref]

44. Odugbesan, J. A., & Rjoub, H. (2020). Relationship among economic growth, energy consumption, CO₂ emissions, and urbanization: Evidence from MINT countries. Sustainability, 12(17), 7317. [Google Scholar] [Crossref]

45. Oecd. (2016). OECD Guidelines for the Testing of Chemicals. Organization for Economic. [Google Scholar] [Crossref]

46. Ogundipe, A. A., Alege, P. O., & Ogundipe, O. M. (2020). Energy consumption and environmental degradation in Nigeria: A reassessment of the Environmental Kuznets Curve hypothesis. Energy Reports, 6, 686–695. [Google Scholar] [Crossref]

47. Oje, G. (2024). The Threshold level of Institutional Quality in the Nexus between Financial Development and Environmental Sustainability in Nigeria. Journal of Environmental Science and Economics, 3(1), 42-64. [Google Scholar] [Crossref]

48. Okeke, A. (2021). Economic growth and environmental degradation in Nigeria: does institutional quality stand sensibly? [Google Scholar] [Crossref]

49. Olanrewaju, B. T., Lawal, A. I., & Adedoyin, F. F. (2022). Energy transition and environmental sustainability in Africa: Policy options for green growth. Journal of Cleaner Production, 366, 132902. [Google Scholar] [Crossref]

50. Omisakin, D. O. A. (2009). Economic growth and environmental quality in Nigeria: does environmental Kuznets curve hypothesis hold? Environmental Research Journal, 3(1), 14-18. [Google Scholar] [Crossref]

51. Onuoha, F. C., Uzoechina, B. I., Ochuba, O. I., & Inyang, N. F. (2022). Economic expansion, energy sources and environmental quality in ECOWAS sub-region: evidence from a heterogeneous panel non-linear Autoregressive Distributed Lag (PNARDL). Environmental Science and Pollution Research, 29(6), 8892-8908. [Google Scholar] [Crossref]

52. Osobajo, O. A., Otitoju, A., Otitoju, M. A., & Oke, A. (2020). The impact of energy consumption and economic growth on carbon dioxide emissions. Sustainability, 12(19), 7965. [Google Scholar] [Crossref]

53. Oteng-Abayie, E. F., Duodu, E., Mensah, G., & Frimpong, P. B. (2022). Natural resource abundance, environmental sustainability, and policies and institutions for environmental sustainability in sub-Saharan Africa. Resources Policy, 79, 103097. [Google Scholar] [Crossref]

54. Oyedepo, S. O. (2014). Towards achieving energy for sustainable development in Nigeria. Renewable and sustainable energy reviews, 34, 255-272. [Google Scholar] [Crossref]

55. Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: testing EKC hypothesis with structural breaks. Journal of cleaner production, 187, 770-779. [Google Scholar] [Crossref]

56. Raihan, A., Muhtasim, D. A., Khan, M. N. A., Pavel, M. I., & Faruk, O. (2022). Nexus between carbon emissions, economic growth, renewable energy use, and technological innovation towards achieving environmental sustainability in Bangladesh. Cleaner Energy Systems, 3, 100032. [Google Scholar] [Crossref]

57. Rafindadi, A. A. & Ozturk, I. (2016). Effects of financial development, economic growth and trade on electricity consumption: Evidence from Post-Fukushima Japan. Renewable and Sustainable Energy Reviews, 54, 1073–1084. [Google Scholar] [Crossref]

58. Saidi, K., & Hammami, S. (2015). The impact of CO2 emissions and economic growth on energy consumption in 58 countries. Energy Reports, 1, 62-70. [Google Scholar] [Crossref]

59. Salahuddin, M., & Gow, J. (2019). Effects of energy consumption and economic growth on environmental quality: evidence from Qatar. Environmental science and pollution research, 26(18), 18124-18142. [Google Scholar] [Crossref]

60. Shafiei, S. and Salim, R. A. (2014) Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: a comparative analysis. Energy Policy, 66, 547–556. [Google Scholar] [Crossref]

61. Shafik, N., & Bandyopadhyay, S. (1992). Economic growth and environmental quality: time-series and cross-country evidence (Vol. 904). World Bank Publications. [Google Scholar] [Crossref]

62. Sharif, A., Raza, S. A., Ozturk, I., & Afshan, S. (2019). The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: a global study with the application of heterogeneous panel estimations. Renewable energy, 133, 685-691. [Google Scholar] [Crossref]

63. Sulaiman, C., & Abdul-Rahim, A. S. (2018). Population growth and CO2 emission in Nigeria: a recursive ARDL approach. Sage Open, 8(2), 2158244018765916. [Google Scholar] [Crossref]

64. Shafiei, S. (2013). Economic growth, energy consumption, and environment: assessing evidence from OECD countries (Doctoral dissertation, Curtin University). [Google Scholar] [Crossref]

65. Sovacool, B. K., & Hess, D. J. (2017). Energy and Culture: Perspectives on the Nexus. [Google Scholar] [Crossref]

66. Streimikiene, D., & Kasperowicz, R. (2016). Review of economic growth and energy consumption: A panel cointegration analysis for EU countries. Renewable and Sustainable Energy Reviews, 59, 1545-1549. [Google Scholar] [Crossref]

67. Tong, H., & Lim, K. S. (1980). Threshold autoregression, limit cycles and cyclical data. Journal of the Royal Statistical Society: Series B (Methodological), 42(3), 245- 268. [Google Scholar] [Crossref]

68. Ulucak, Z.S., Ilkay, S., C., Ozcan, B., & Gedikli, A. (2020). Financial globalization and environmental degradation nexus: Evidence from emerging economies. Resources Policy, 67, [Google Scholar] [Crossref]

69. UNFCCC, (2015). United Nations Framework Convention on Climate Change: available at www.unfccc.int [Google Scholar] [Crossref]

70. Vosooghzadeh, B. (2020). Introducing energy consumption theory and its positive impact on the economy. [Google Scholar] [Crossref]

71. Wang, Q., Su, M., & Li, R. (2018). Toward to economic growth without emission growth: The role [Google Scholar] [Crossref]

• Impact of Foreign Direct Investment in India
• Issues Involved in Digitalisation Special Reference to Indian Tourism Growth
• Relationship Marketing and Customer Loyalty in the Fast-Moving Consumer Goods (FMCG) Industry in Nairobi County
• Financial Literacy or Financial Inclusion? Which is Which, What is What—To Achieve Uganda’s 10-Fold Economic Growth By 2040
• Harnessing Natural Gas for Economic Transformation: Overcoming the Regulatory and Infrastructural Bottlenecks in Nigeria