Does Energy Mix Matter for Environmental Degradation? New Insights from Global Warming in Nigeria

Abstract

Nigeria's huge dependence on fossil fuels and the gradual transition to clean and renewable energy, alongside targeted investments in nuclear energy infrastructure, have raised concerns about environmental sustainability. In this light, we provide new insights into the environmental degradation implications of this energy mix, focusing on global warming. The main objective of the study is to ascertain how fossil fuel energy utilisation, renewable energy use and alternative/nuclear energy use contributed to global warming. Specifically, we employed the Johansen cointegration test and the Toda-Yamamoto causality test to analyse the long-run relationship and direction of causality between energy mix indicators and global warming. The findings showed evidence of cointegration between the energy mix indicators and global warming, suggesting that the energy mix can be relied upon to predict long-term changes in Nigeria's contribution to global temperature change. The results of the Toda-Yamamoto causality test show evidence of unidirectional causality flowing from fossil fuel energy utilisation to global warming at the 5% level. This finding is not surprising, considering that the combustion of fossil fuels is associated with the release of substantial amounts of carbon dioxide into the atmosphere. The results further showed a one-way causality flowing from renewable energy use to global warming, highlighting the ineffectiveness of current renewable energy practices in mitigating environmental degradation. This undesirable outcome may be linked to unsustainable biomass use and poorly developed renewable energy infrastructure, particularly solar panels, which can reduce efficiency and lead to greater reliance on fossil- fuel- based backup generation with a high carbon footprint. Therefore, we recommend that the government internalise the environmental costs of fossil fuel use by imposing a price on carbon dioxide emissions payable by emitters, while prioritising access to improved renewable energy infrastructure and ensuring sustainable biomass utilisation.