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

Summary/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 short-term 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.

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