Mitigating Climate Change in Nigeria: Fuel Subsidy Removal as a Possible Policy Option
16 Pages Posted: 23 Jan 2013
Date Written: January 22, 2013
This paper argues that policies that discourage the demand for non-renewable energy can be used to cut down CO2 emission as it would help to discourage consumption patterns away non-renewable energy sources. The transmission mechanism can be deduced from the high price that the withdrawal of fuel subsidy would bring and the resultant downward adjustment in non-renewable energy use in consumption and production (such as emission from vehicles) which would bring about reduction in total emission. The study focused on Nigeria as a significant oil producing country in Sub Saharan Africa and employs narrative method for its analysis. The study concludes that while fuel subsidy removal policy (in the short term) would have welfare implications, in the long run, the policy would bring about greener growth and enhance sustainable development.
Keywords: Fuel Subsidy, Second Best, Climate Change, Green Deve
JEL Classification: H25, D52, Q54, Q48
Suggested Citation: Suggested Citation