ABSTRACT
This study models the Kaya identity equation for carbon dioxide (CO2) emissions in a panel of 20 oil-rich countries from 1994 to 2019. The estimators used are robust to cross-sectional dependence and allow for heterogeneous slope coefficients. The results indicate that natural resource extraction hinders environmental sustainability in oil-rich countries by altering the structural composition of their consumption mix towards energy- and carbon-intensive technologies. However, this relationship is only significant after reaching a turning point level of resource extraction. This suggests that the carbon curse is only triggered at higher levels of resource dependence, supporting a U-shaped relationship between natural resource extraction and CO2 emissions. The threshold for the natural rents to GDP ratio, beyond which natural resource extraction triggers the carbon curse, is found to be 12.18 %. The vulnerability assessment reveals that 17 countries in the panel, including Algeria, Kazakhstan, the United Arab Emirates, Iran, Iraq, Kuwait, Qatar, Oman, Saudi Arabia, the Congo Republic, and Libya, are already within the carbon curse zone. From a policy perspective, promoting sustainable development in oil-rich economies requires a shift towards renewable energy sources, reducing reliance on fossil fuels, and widespread adoption of energy efficiency and conservation mechanisms.
ABSTRACT
This study investigates the asymmetric dynamic effects of financial development on ecological footprint in Nigeria over the period 1971-2014 using the nonlinear autoregressive distributed lag (NARDL) framework. Ecological footprint in Nigeria is classified into carbon footprint, non-carbon footprint, and total ecological footprint. The results show that in Nigeria, a positive shock in financial development (an increase in financial development) has significant reducing effect on ecological footprint (i.e., improves environmental sustainability) while a negative shock in financial development (a decline in financial development) has significant increasing effect on ecological footprint (i.e., deteriorates environmental sustainability). Asymmetry test shows that a significant difference exists in how negative and positive shocks in financial development impact on carbon footprint and total ecological footprint, but not for non-carbon footprint. On the basis of the total ecological footprint, the adjustment asymmetry from the dynamic multiplier graph shows that the response of ecological footprint to a negative shock in financial development is stronger. Further findings from the analysis show that economic growth, energy consumption, urbanization, and economic globalization are all drivers of environmental sustainability in Nigeria. Overall, the results highlight the need for a deepened financial system, as part of the strategies for achieving sustainable development in Nigeria.
