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The Empirics of Per Capita Income Growth, Resources Rents and Environmental Quality in Nigeria

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  • Aderopo Raphael Adediyan
  • Uchenna Kingsley Chigozie
  • Oseremen ThankGod Ehisuoria

Abstract

This paper attempts to analyze the interaction among resources rents, per capita income growth and the environmental quality in Nigeria. Using annual time-series data between 1986 and 2018, the paper adopted the SVAR approach. The study suggests that per capita income growth (PCY) has a long-term negative and short-term positive impact on environmental quality (CO2). Also, natural resources rent (NRR) has a shortterm negative and positive impact, with roughly the same length of time, on the PCY, suggesting that its overall impact over the simulated period may be neutral. Nonetheless, the study further suggests that the dominant source of variation in PCY came from own shock and shocks in the CO2. Additionally, while NRR had long term negative and short term positive impact on CO2, the dominant source of movement in CO2 asides own shock came from a perturbation in PCY. In conclusion, among others, policies designed to expand resources rents may not help a lot to promote per capita income growth and could contribute to a further deterioration of the state of the environment over time in Nigeria.

Suggested Citation

  • Aderopo Raphael Adediyan & Uchenna Kingsley Chigozie & Oseremen ThankGod Ehisuoria, 2020. "The Empirics of Per Capita Income Growth, Resources Rents and Environmental Quality in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(3), pages 72-80, September.
    • Handle: RePEc:khe:scajes:v:6:y:2020:i:3:p:72-80
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    References listed on IDEAS

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    1. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth," Published Papers kazn01, Russian Presidential Academy of National Economy and Public Administration.
    2. Thorvaldur Gylfason & Gylfi Zoega, 2006. "Natural Resources and Economic Growth: The Role of Investment," The World Economy, Wiley Blackwell, vol. 29(8), pages 1091-1115, August.
    3. Goodness C. Aye & Prosper Ebruvwiyo Edoja, 2017. "Effect of economic growth on CO2 emission in developing countries: Evidence from a dynamic panel threshold model," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1379239-137, January.
    4. Edward Barbier, 2007. "Frontiers and sustainable economic development," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 271-295, May.
    5. Auty, Richard M., 2003. "Natural Resources, Development Models and Sustainable Development," Discussion Papers 24136, International Institute for Environment and Development, Environmental Economics Programme.
    6. Murshed, S. Mansoob, 2004. "When Does Natural Resource Abundance Lead to a Resource Curse?," Discussion Papers 24137, International Institute for Environment and Development, Environmental Economics Programme.
    7. Rabia Ece Omay, 2013. "The Relationship between Environment and Income:Regression Spline Approac," International Journal of Energy Economics and Policy, Econjournals, vol. 3(Special), pages 52-61.
    8. Saibu Muibi Olufemi & Mesagan Ekundayo Peter, 2016. "Environmental Quality and Growth Effects of Foreign Direct Investment in Nigeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(2), pages 125-140, Spring.
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    Cited by:

    1. Nwani, Chinazaekpere & Adams, Samuel, 2021. "Environmental cost of natural resource rents based on production and consumption inventories of carbon emissions: Assessing the role of institutional quality," Resources Policy, Elsevier, vol. 74(C).
    2. Khan, Yasir & Hassan, Taimoor & Guiqin, Huang & Nabi, Ghulam, 2023. "Analyzing the impact of natural resources and rule of law on sustainable environment: A proposed policy framework for BRICS economies," Resources Policy, Elsevier, vol. 86(PA).
    3. Liu, Xiaolian & Udemba, Edmund Ntom & Emir, Firat & Hussain, Sadam & Khan, Nazakat Ullah & Abdallah, Ibrahim, 2024. "Nexus between resource policy, renewable energy policy and export diversification: Asymmetric study of environment quality towards sustainable development," Resources Policy, Elsevier, vol. 88(C).
    4. Wang, Wen & Niu, Yanfang & Gapich, Alexander & Strielkowski, Wadim, 2023. "Natural resources extractions and carbon neutrality: The role of geopolitical risk," Resources Policy, Elsevier, vol. 83(C).
    5. Liu, Lili, 2023. "Natural resources extraction and global COP26 target: An overview of USA economy," Resources Policy, Elsevier, vol. 82(C).
    6. Nguyen, Thi Hao & Deng, Hongbing & Abbas, Zainab Zahra & Lam, Thi Thoa & Abbas, Hussain Raza, 2024. "The effect of natural capital, regional development, FDI, and natural resource rent on environmental performance: The Mediating role of green innovation," Resources Policy, Elsevier, vol. 91(C).

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    More about this item

    Keywords

    Environmental Quality; Per Capita Income Growth; Natural Resources Rent; SVAR;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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