Mitigating Climate Change in Nigeria: Fuel Subsidy Removal as a Possible Policy Option

16 Pages Posted: 23 Jan 2013

See all articles by Terfa Abraham

Terfa Abraham

National Institute for Legislative Studies

Date Written: January 22, 2013

Abstract

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

Abraham, Terfa, Mitigating Climate Change in Nigeria: Fuel Subsidy Removal as a Possible Policy Option (January 22, 2013). USAEE Working Paper No. 13-105, Available at SSRN: https://ssrn.com/abstract=2205514 or http://dx.doi.org/10.2139/ssrn.2205514

Terfa Abraham (Contact Author)

National Institute for Legislative Studies ( email )

14/18 Danube Street
Maitama, Abuja
Nigeria

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