AN ASSESSMENT OF THE EFFECT OF CARBON DIOXIDE EMISSIONS ON THE ECONOMY OF KOGI STATE.

Abstract

This research article assessed the effect of CO2 emissions on the Nigerian state of Kogi. The main objective of the study was to determine the potential financial implications of reducing CO2 emissions and to examine the relationship between CO2 emissions and economic growth in Kogi State. To provide background information on the topic, a thorough literature review was conducted, and a method for data analysis was developed. The study's results revealed a positive correlation between CO2 emissions and economic growth in Kogi State, suggesting that reducing emissions could potentially have an unfavorable impact on the state's economy. The research also identified the financial benefits of decreasing CO2 emissions and estimated the related costs. The study's findings could help Kogi State make decisions on policies that would lower CO2 emissions while minimizing adverse impacts on the economy. Many studies using various methods have examined the relationship between Nigeria's economic growth and carbon dioxide emissions. However, several of these investigations have failed to include the development of the financial sector. Therefore, this study examines the effect of CO2 emissions and financial development on economic growth in Kogi State between 2019 and 2022 utilizing the ARDL bounds testing method. The bounds test for co-integration results show that there is long-run co-integration among the variables because the F-statistic is greater than the upper bound at the 1% level. The estimation's findings revealed that increasing emissions had a significant and beneficial impact on economic growth in Kogi State. Financial openness and development had a notable beneficial effect on economic growth, while domestic investment had a significant unfavorable impact on it. Based on the study's findings, the following suggestions were proposed: Firstly, the government should implement suitable measures to restrict emissions because increasing production raises environmental hazards and hinders economic progress in Kogi State. Secondly, the government must clarify to polluters and other mining companies that disregard its directives the consequences of their actions.