Energy Economics Letters

Global relationships among energy, environmental and macroeconomic variables with income and regional considerations

Christos Agiakloglou — 2025-02-06

This study investigates relationships between energy, environmental, agricultural and macroeconomic variables for 43 countries taking also into consideration income and regional effects. The aim of this research is to investigate the overall attitude of these countries towards energy consumption, economic growth and the environment at a global level, a result that could play an important role for policy recommendations for each country under its particular characteristics. Panel data estimations techniques along with Granger causality, cointegration tests and error correction models are used to extract meaningful results from the data, while data are split based on countries’ income (High income versus Medium and Low income) and countries’ region (Africa, Asia, America and Europe). The results show that the relationships of these variables alter according to the data formation, especially under income categorization, while under regional categorization agricultural and forest variables play a dominant role in the economic activity of each region supporting also long-term relationships with energy and macroeconomic variables. These results can raise awareness for different policy recommendations on the environment, as it seems that it is important to consider the overall growth stage of the country and not just the region to which it belongs.

Testing the validity of EKC hypothesis using CO2 emissions and ecological footprint in Nigeria: The role of financial development

Yusuf Shamsuddeen Nadabo — 2025-02-06

This study examines the Environmental Kuznets Curve (EKC) Hypothesis in Nigeria by analysing carbon dioxide emissions and ecological footprint from 1991 to 2022. Using the autoregressive distributed lag (ARDL) bounds test for cointegration and the Toda-Yamamoto causality approach, findings reveal a positive correlation between economic growth and both CO₂ emissions and ecological footprint, indicating that environmental impacts rise with economic growth. An inverted U-shaped relationship is observed between economic growth and CO₂ emissions, suggesting a threshold beyond which further growth could reduce emissions. Financial development, trade openness, and urbanization significantly influence CO₂ emissions and ecological footprint, underscoring the need for sustainable policies. Key recommendations include promoting sustainable urbanization, encouraging green investments through financial regulations, monitoring trade activities, and incentivizing renewable energy adoption. Utilizing green financial products like Sukuk for funding priority infrastructure projects could enhance renewable energy use, environmental sustainability, and financial sector growth in Nigeria. These findings emphasize the urgency for policy interventions to align economic growth with environmental sustainability, ensuring a balanced approach to development while mitigating adverse ecological impacts.

Nerlovian stock adjustment approach to electric power consumption among households’ in Nigeria

Najeem O. Bashir — 2025-06-24

The research examined the impact of time on households’ current electricity demand among households in Nigeria. Specifically it examined the effects of consumers’ previously earned income and acquired electrical appliances on their current energy consumption, hence a dynamic demand analysis. The study analyzed 42 years annual series spanning 1981 through 2023. Household Income, Electricity demand and tariff are the study variables. An ARDL regression and other robustness checks were fitted. Results showed that previous Electricity demand caused current demand to significantly rise by 37%. Increase in households’ past and current income also led to an increase in current power demand. About 91.8% of the short and long run imbalances among the series are corrected in subsequent years, as indicated by the estimated ECT(-1). It is concluded that past electricity demand and previous income positively and significantly influenced households’ current power demand, albeit the dampening effect of power tariff. As tariff-increase polices are been implemented, regular income review is recommended. If tariff increase was necessary, it should be mildly administered given its dampening effect on real income.

Dynamic response of economic growth to environmental degradation in Nigeria

Olabode Eric Olabisi — 2025-06-25

With the global climate change threat, achieving environmental sustainability has become a major concern among the world leaders, scholars, and researchers in the fields of environmental and economic growth-related studies. The aim of this paper is to examine the dynamic response of economic growth to environmental degradation in Nigeria from 1980 to 2022. Using the econometric technique of autoregressive distributed lags (ARDL) model, findings show that while environmental degradation often accompanies economic growth, its impact on long-term growth is weak and not statistically significant. Variables such as carbon emissions, financial development, and trade openness show mixed results regarding their influence on economic growth. Interest rates are identified as having a minor positive effect on GDP, particularly in the short run. The study concludes that a growing population positively affects GDP by expanding the labour force and enhancing economic productivity. The study emphasises the need for integrated economic policies that consider both financial and environmental management to ensure sustainable growth.

Climate change and income inequality in Sub-Saharan African countries

Naftaly Mose — 2025-07-11

The potential for a feedback relationship between climate change and income inequality has become a concern in sub-Saharan African (SSA) countries due to its significant environmental and socio-economic impacts. This study aims to inform policymakers on ways to address inequality and climate resilience in the region simultaneously. It examines the relationship between climate change and income inequality in SSA countries, focusing on Kenya, Tanzania, and Uganda, by analyzing data from these three countries between 2009 and 2023. The Dumitrescu and Hurlin adaptation of the Granger causality test and pooled ordinary least squares research techniques were used in the analysis. The results of the pooled ordinary least squares model reveal that rising income inequality has a positive impact on climate change. Conversely, climate change exhibits a positive impact on income inequality. The Dumitrescu-Hurlin causality evidence indicates a strong, bidirectional relationship between climate change and income inequality in the three countries. This implies that the lagged value of climate change explains the variation in income inequality, with a feedback response where the lagged value of income inequality is instrumental in predicting climate change. The study suggests implementing inclusive economic growth and development policies aligned with climate mitigation measures and adaptation objectives.