ECONOMIC GROWTH AND ENVIRONMENTAL SUSTAINABILITY: ASSESSING THE VALIDITY OF THE ENVIRONMENTAL KUZNETS CURVE IN NIGERIA

Abstract

The environmental Kuznets curve (EKC) hypothesis explores the relationship between
economic growth and environmental quality, suggesting that environmental degradation
initially worsens with economic growth but improves after reaching a specific income
threshold. While evidence supporting the EKC exists for some pollutants and countries, results
remain mixed for Nigeria. This study therefore reexamines the EKC hypothesis for Nigeria,
focusing on key environmental degradation indicators: CO2 emissions, fossil fuel consumption,
resource depletion, and erosion. Specifically, it investigates whether an EKC relationship exists
between these indicators and GDP growth. The study also determine Nigeria’s growth
threshold, above which economic growth benefits the environment. Using time-series data
from 1981 to 2023 sourced from the World Bank’s World Development Indicators, the study
employed threshold regression analysis to evaluate the validity of EKC hypothesis. The results
reveal mixed alignment with the EKC hypothesis. While some indicators of environmental
degradation validate the EKC hypothesis, others refute it. This study, therefore, concludes that
economic growth impacts only some aspects or components of environmental degradation.
Accordingly, policy measures such as adoption of green technologies, promotion of renewable
energy, and enforcement of stricter environmental regulations are recommended in order to
achieve sustainable economic growth. Adopting these measures would reduce pollution,
conserve natural resources, and mitigate climate change, fostering a balance between economic
growth and environmental sustainability.