Effect of Environmental Degradation on Economic Growth Nigeria

Abstract

This study examined the effect of environmental degradation on economic growth in Nigeria, using carbon dioxide (CO₂) emissions as a proxy for environmental degradation alongside selected macroeconomic variables, including real interest rate, investment, inflation, and technological innovation. The empirical results revealed that, at the 5% level of significance, only the lagged value of GDP had a positive and statistically significant effect on current economic growth, indicating strong persistence in economic performance. Although carbon dioxide (CO₂) emissions exhibited a negative relationship with economic growth, the effect was statistically insignificant. Similarly, real interest rate, investment, inflation, and technological innovation did not significantly influence economic growth during the study period. The findings suggest that environmental degradation did not have a significant impact on Nigeria's economic growth over the period examined. The study recommends the implementation of sustainable environmental policies, increased investment in green technologies, and improved macroeconomic policies to promote long-term economic growth while protecting environmental quality.