Does agricultural value added induce environmental degradation? Empirical evidence from an agrarian country

Abstract

This study empirically investigates the agriculture-induced environmental Kuznets curve (EKC) hypothesis in an agrarian framework. Annual time series data from 1981-2014 was employed using Augmented Dickey-Fuller and the Phillips-Perron (PP) unit root test complemented by the Zivot and Andrews unit root test that accounts for a single structural break to ascertain stationarity properties of variables under consideration. For the cointegration analysis, an autoregressive distributive lag methodology and the recent novel Bayer and Hanck combined cointegration technique is employed. For the direction of causality, the Granger causality test is used as estimation technique. Empirical findings lend support for the long-run equilibrium relationship among the variables under consideration. This study also validates the inverted U-shaped pattern of EKC for the case of Nigeria, affirming that Nigeria remains at the scale-effect stage of its growth trajectory. Further empirical results show that foreign direct investment attraction helps mitigate carbon emissions in Nigeria. Based on these results, several policy prescriptions on the Nigerian energy mix and agricultural operations in response to quality of the environment were suggested for policymakers, stakeholders, and environmental economists that formulate and design environmental regulations and strategies to realise the Goal 7 of sustainable development goals (SDGs).

The nexus of environmental sustainability and agro-economic performance of Sub-Saharan African countries

“…This finding is in line with the submission of Appiah et al. (2018) , Agboola and Bekun (2019) , and Gokmenoglu and Taspinar (2018) .…”

“…So, changes in previous historical information of the real gross domestic product are capable of predicting future changes in carbon dioxide emissions. Though this result disagrees with Agboola and Bekun (2019) and Alola and Alola (2018) , it is not different from the submission of Appiah et al (2018) for some selected emerging economies.…”

“…This result, of course, contrasts the findings of Appiah et al. (2018) , Agboola and Bekun (2019) , Sarkodie and Owusu (2017), as well as Gokmenoglu and Taspinar (2018) for some selected emerging economies, China, Tunisia, Nigeria, Ghana, and Pakistan respectively. The contradictory finding may be due to the difference in the method of analysis or the renewed attention giving to the environment in sub-Saharan African countries.…”

“…This result suggests that even though sub-Saharan Africa like many other regions of the world finds it challenging to maintain a clean environment at the early stage of economic growth possibly due to increase in greenhouse gases and other forms of carbon dioxide emission, the region performs excellently at the later stage of economic growth. Improvement in environmental quality or decline in carbon dioxide emission at the later stage of economic growth has also been obtained in other region or countries (see Agboola and Bekun, 2019 ; Gokmenoglu and Taspinar, 2018 ; Alola, Yalçiner, Alola and Saint, 2019 ; Gokmenoglu and Taspinar, 2018 ). This result may be attributed to the use of low carbon-emitting material or the availability of resources to address the problem of environmental degradation.…”

“…Several variables have been included in the EKC model such as agricultural output ( Kaczan et al, 2013 ; Kim et al, 2015 ; Asumadu-Sarkodie and Owusu, 2016 ; Bennetzen et al, 2016 ; Li et al, 2016 ; Mehdi and Slim, 2017 ; Gokmenoglu and Taspinar, 2018 ; Agboola and Bekun, 2019 ; Ben Jebli et al, 2020 ), urbanization ( Wang et al, 2019 ) and natural resource rent ( Bekun et al, 2019 ; Balsalobre-Lorente et al, 2018 ). The role of agriculture in the EKC is explained through its relationship with economic growth.…”