Fuel Subsidy Reform and Environmental Quality in Nigeria

25 Pages Posted: 2 Sep 2014

See all articles by Opeyemi Akinyemi

Opeyemi Akinyemi

Covenant University

Philip O. Alege

Covenant University

Lloyd Amaghionyeodiwe

Strayer University - Department of Economics

Adeyemi Ogundipe

Covenant University

Date Written: September 1, 2014

Abstract

The study examines the existence of a long run effect of fuel subsidy reforms on environmental quality in Nigeria for the period 1970 to 2012 using the Johansen and the Engle-Granger two step co-integration procedure techniques. Findings from the study supported evidence of a long run sustainable equilibrium model. The study developed a three case scenarios including i) a case of subsidy payment, ii) a case of effective subsidy and, iii) a case of no subsidy payment. Our estimation results showed that the first and the last case scenario do not significantly influence environment quality while an interaction of sound regulatory framework with subsidy payment (the case of effective subsidy) significantly exerts a responsive influence on environmental quality.

Keywords: Subsidy Reform, Environmental Quality, Climate Change, Johansen Cointegration

JEL Classification: H23, Q51, Q54

Suggested Citation

Akinyemi, Opeyemi and Alege, Philip Olasupo and Amaghionyeodiwe, Lloyd and Ogundipe, Adeyemi, Fuel Subsidy Reform and Environmental Quality in Nigeria (September 1, 2014). Available at SSRN: https://ssrn.com/abstract=2489904 or http://dx.doi.org/10.2139/ssrn.2489904

Opeyemi Akinyemi (Contact Author)

Covenant University ( email )

Canaanland
Km 10 Idiroko road
Ota, 24001
Nigeria

Philip Olasupo Alege

Covenant University ( email )

P.M.B. 1023
Km 10 Idiroko road
Ota, Ogun State 234
Nigeria

Lloyd Amaghionyeodiwe

Strayer University - Department of Economics ( email )

United States

Adeyemi Ogundipe

Covenant University ( email )

Canaanland
Km 10 Idiroko road
Ota, 24001
Nigeria
+2348161927372 (Phone)

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