Causal Link between Employment and Renewable Energy Consumption: Evidence from Nigeria
Abstract
The paper examined the causal link between employment and renew-able energy consumption in Nigeria for the period of 1991 to 2014 using annual time series data. The Toda-Yamamoto Granger Causal-ity approach was used for causal analysis and Johansen cointegration technique to verify the long-run relationship between model variables. The results supported the conservation hypothesis with unidirectional causality from employment to energy consumption, but no evidence of cointegration was established. The study recommends that Nigeria should review its energy policy in order to promote private investment in renewable energy projects towards finding a sustainable solution to help solve the energy crisis, create employment opportunities, and minimise environmental pollution peculiar to long-term use of fossil fuel.
References
Akpan, G. E., & Akpan, U. F. (2012). Electricity Consumption, Carbon Emissions and Economic Growth in Nigeria. International Journal of Energy Economics and Policy, 2(4), 292-306.
Altinay, G., & Karagol, E. (2005). Electricity Consumption and Economic Growth: Evidence from Turkey. Energy Economics, 27, 849-856.
Apergis, N., & Payne, J. E. (2011). The Renewable Energy Consumption - Growth Nexus in Central America. Applied Energy, 88(1), 343-347. DOI:10.1016/j.apenergy.2010.07.013
Arouri, M. E. H., Youseff, A.B., M’Henni, H., & Rault, C. (2014). Exploring the Causality Links between Energy and Employment in African Countries. IZA Discussion Paper No. 8296. Retrieved from http://anon-ftp.iza.org/dp8296.pdf
Awokuse, T. O. (2003). Is the Export-led Growth Hypothesis Valid for Canada? The Canadian Journal of Economics / Revue Canadienne d'Economique, 36(1), 126-136. DOI:10.1111/1540-5982.00006
Bahmani-Oskooee, M., & Alse, J. (1993). Export growth and Economic growth: An Application of Cointegration and Error-correction Modelling. The Journal of Developing Areas, 27(4), 535-542.
Bauer, D., & Maynard, A. (2012). Persistence-robust Surplus-lag Granger Causality Testing. Journal of Econometrics, 169(2), 293-300. DOI:10.1016/j.jeconom.2012.01.023
Bilgili, F., & Ozturk, I. (2015). Biomass Energy and Economic Growth Nexus in G7 countries: Evidence from Dynamic Panel Data. Renewable and Sustainable Energy Reviews, 49, 132-138. DOI:10.1016/j.rser.2015.04.098
Bosupeng, M. (2016). Adverse Effects of the Automotive Industry on Carbon Dioxide Emissions. The European Journal of Applied Economics, 13(1), 1-12. DOI:10.5937/ejae13-9345
Çetin, M., & Eğrican, N. (2011). Employment Impacts of Solar Energy in Turkey. Energy Policy, 39(11), 7184-7190. DOI:10.1016/j.enpol.2011.08.039
Chang, T., Fang, W., & Wen, L. (2001). Energy Consumption, Employment, Output, and Temporal Causality: Evidence from Taiwan Based on Cointegration and Error-Correction Modelling Techniques. Applied Economics, 33(8), 1045-1056. DOI:10.1080/00036840122484
Clarke, J. A., & Mirza, S. (2006). A Comparison of Some Common Methods for Detecting Granger Noncausality. Journal of Statistical Computation and Simulation, 76(3), 207-231. DOI:10.1080/10629360500107741
Dolado, J., & Lütkepohl, H. (1996). Making Wald Tests Work for Cointegrated VAR Systems. Econometric Reviews, 15(4), 369-386. DOI:10.1080/07474939608800362
Ebohon, O. J. (1996). Energy, Economic Growth and Causality in Developing Countries: A Case Study of Tanzania and Nigeria. Energy Policy, 24(5), 447-453. DOI:10.1016/0301-4215(96)00027-4
Esso, L. J. (2010). Threshold cointegration and causality relationship between energy use and growth in seven African countries. Energy Economics, 32(6), 1383-1391. DOI:10.1016/j.eneco.2010.08.003
Granger, C. W. J. (1969). Investigating Causal Relations by Econometric Models and Cross-spectral Methods. Econometrica, 37(3), 424-438. DOI:10.2307/1912791
Ighodaro, C. A. U. (2010). Co‐Integration and Causality Relationship between Energy Consumption and Economic Growth: Further Empirical Evidence for Nigeria. Journal of Business Economics & Management, 11(1), 97-111. DOI:10.3846/jbem.2010.05
Inglesi-Lotz, R. (2016). The Impact of Renewable Energy Consumption to Economic Growth: A Panel Data Application. Energy Economics, 53, 58-63. DOI:10.1016/j.eneco.2015.01.003
Jespersen, J. (1999). Reconciling Environment and Employment by Switching from Goods to Services? A Review of Danish Experience. European Environment, 9(1), 17-23. DOI:10.1002/(SICI)1099-0976(199901/02)9:1<17::AID-EET180>3.0.CO;2-J
Johansen, S., & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration - With Applications to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52(2), 169-210.
Kahia, M., Aïssa, M. S. B., & Lanouar, C. (2017). Renewable and Non-renewable Energy use - Economic growth Nexus: The Case of MENA Net Oil Importing Countries. Renewable and Sustainable Energy Reviews, 71, 127-140. DOI:10.1016/j.rser.2017.01.010
Koçak, E., & Şarkgüneşi, A. (2017). The Renewable Energy and Economic Growth Nexus in Black Sea and Balkan Countries. Energy Policy, 100, 51-57. DOI:10.1016/j.enpol.2016.10.007
Lin, B., & Moubarak, M. (2014). Renewable Energy Consumption - Economic Growth Nexus for China. Renewable and Sustainable Energy Reviews, 40, 111-117. DOI:10.1016/j.rser.2014.07.128
Lise, W., & Van Montfort, K. (2007). Energy Consumption and GDP in Turkey: Is there a Co‐Integration Relationship? Energy Economics, 29(6), 1166-1178. DOI:10.1016/j.eneco.2006.08.010
Longe, A. E., Ajulo, K. D., Omitogun, O., & Adebayo, E. O. (2018). Trade, Transportation and Environment Nexus in Nigeria. The European Journal of Applied Economics, 15(2), 29-42. DOI:10.5937/EJAE15-17360
Matthew, O. A., Ede, C. U., Osabohien, R., Ejemeyovwi, J., Fasina, F. F., & Akinpelumi, D. (2018). Electricity Consumption and Human Capital Development in Nigeria: Exploring the Implications for Economic Growth. International Journal of Energy Economics and Policy, 8(6), 8-15. DOI:10.32479/ijeep.6758
Menegaki, A. N., & Tugcu, C. T. (2016). Rethinking the Energy-Growth Nexus: Proposing an Index of Sustainable Economic Welfare for Sub-Saharan Africa. Energy Research & Social Science, 17, 147-159. DOI:10.1016/j.erss.2016.04.009
Menegaki, A. N., & Tugcu, C. T. (2017). Energy Consumption and Sustainable Economic Welfare in G7 Countries; A Comparison with the Conventional Nexus. Renewable and Sustainable Energy Reviews, 69, 892-901. DOI:10.1016/j.rser.2016.11.133
Menyah, K., & Wolde-Rufael, Y. (2010). CO2 Emissions, Nuclear Energy, Renewable Energy and Economic Growth in the Us. Energy Policy, 38, 2911-2915. DOI:10.1016/j.enpol.2010.01.024
Nisbet, M. C., & Myers, T. (2007). Trends: Twenty Years of Public Opinion About Global Warming. The Public Opinion Quarterly, 71(3), 444-470.
Ocal, O., & Aslan, A. (2013). Renewable Energy Consumption–Economic Growth Nexus in Turkey. Renewable and Sustainable Energy Reviews, 28, 494-499. DOI:10.1016/j.rser.2013.08.036
Osigwe, A. C., & Arawomo, D. F. (2015). Energy Consumption, Energy Prices and Economic Growth: Causal Relationships based on Error Correction Model. International Journal of Energy Economics and Policy, 5(2), 408-414.
Ozturk, I., & Bilgili, F. (2015). Economic Growth and Biomass Consumption Nexus: Dynamic Panel Analysis for Sub-Sahara African Countries. Applied Energy, 137, 110-116. DOI:10.1016/j.apenergy.2014.10.017
Papapetrou, E. (2001). Oil Price Shocks, Stock Market, Economic Activity and Employment in Greece. Energy Economics, 23(5), 511-532. DOI:10.1016/S0140-9883(01)00078-0
Payne, J. E. (2009). On the Dynamics of Energy Consumption and Output in the US. Applied Energy, 86, 575-577. DOI:10.1016/j.apenergy.2008.07.003
Sadorsky, P. (2009). Renewable Energy Consumption and Income in Emerging Economies. Energy Policy, 37(10), 4021-4028. DOI:10.1016/j.enpol.2009.05.003
Schelling, T. C. (1992). Some Economics of Global Warming. The American Economic Review, 82(1), 1-14.
Sebri, M., & Ben-Salha, O. (2014). On the Causal Dynamics between Economic Growth, Renewable Energy Consumption, CO2 Emissions and Trade Openness: Fresh Evidence from BRICS Countries. Renewable and Sustainable Energy Reviews, 39, 14-23. DOI:10.1016/j.rser.2014.07.033
Sims, C. A. (1972). Money, Income and Causality. American Economic Review, 62(4), 540-552.
Toda, H. Y., & Yamamoto, T. (1995). Statistical Inference in Vector Autoregressions with Possibly Integrated Processes. Journal of Econometrics, 66(1-2), 225-250. DOI:10.1016/0304-4076(94)01616-8
Vaona, A. (2012). Granger Non-Causality Tests between (Non)Renewable Energy Consumption and Output in Italy Since 1861: The (Ir)Relevance of Structural Breaks. Energy Policy, 45, 226-236. DOI:10.1016/j.enpol.2012.02.023
Warrick, R., & Farmer, G. (1990). The Greenhouse Effect, Climatic Change and Rising Sea Level: Implications for Development. Transactions of the Institute of British Geographers, 15(1), 5-20. DOI:10.2307/623089
