Abstract:

There is growing interest for the use of renewable energy and carbon dioxide emission in Nigeria, and the world over.Despite the volume of consumption, and the enabling oil and gas laws to protect the environment and improve the well-being of citizens over the years, the gross fixed capital formation have not received a remarkable growth in Nigeria which motivated for this study. The gross fixed capital formation was the dependent variable against energy consumption, and carbon dioxide emission that represented the explanatory variables were sourced from the World Bank and the Central Bank of Nigeria Statistical Bulletin between 1985-2014. The study adopted the Augmented Dickey-Fuller and the Autoregressive Distributive Lag model for the analysis. The data were integrated at levels and first order differenced. The Johansen cointegration test indicated co-integrating equations in long run. Furthermore, the error correction found energy consumption to be positive, while carbon dioxide emission had a negative but insignificant impact on the Nigerian fixed capital formation. The study recommended the ministry of environment to enforce the existing oil and gas laws, and advocate for the use of modern energy in rural areas of Nigeria.

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