The Impact of Renewable Energy Sources and Economic Growth on the Environmental Quality in Nigeria

Abstract

Renewable energy sources, such as solar, wind, geothermal and hydropower, have the potential to drive economic growth without compromising environmental quality. However, many studies have examined renewable energy consumption as a whole, with little focus on the individual effects of different renewable energy sources that are most relevant to Nigeria’s economic and environmental landscape. This study aims to analyze the impact of specific renewable energy sources and economic growth on environmental quality in Nigeria, using a time-series dataset spanning from 2000 to 2022.The findings reveal that a one-unit increase in per capita GDP leads to a rise in the ecological footprint per person by 2.59 × 10-4 units, while a one-unit increase in per capita squared GDP reduces the ecological footprint per person by 4.21 × 10-8 units. This confirms the Environmental Kuznets Curve (EKC) hypothesis, indicating that economic growth initially worsens environmental quality but improves it at higher income levels. Additionally, a one-unit increase in solar energy reduces the ecological footprint per person by 2.07 × 10-3 units, though the effect is not statistically significant. Conversely, a one-unit rise in hydropower consumption increases the ecological footprint per person by 2.5 × 10-5 units, suggesting potential environmental concerns associated with hydropower use. Furthermore, a one-unit increase in Human Capital Development (HCD) leads to a reduction in the ecological footprint per person by 4.99 units, emphasizing the role of education and skill development in promoting environmental sustainability. Overall, the study concludes that economic growth initially harms environmental quality but later contributes to its improvement. While solar energy does not show a significant environmental impact, hydropower consumption and human capital development play a more pronounced role in shaping environmental outcomes in Nigeria.