Green Financing and Climate Change in Nigeria

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides empirical evidence on green finance-CO2 nexus using ARDL for Nigeria, useful for comparative studies.

🏢実務担当者:Offers insights for financial institutions in Nigeria on the effectiveness of green financing instruments.

🏛政策担当者:Highlights the need for strong institutional quality and financial development to enhance green finance impact.

Nigeria's vulnerability to climate change is acute, yet its green financing ecosystem remains nascent, fragmented, and institutionally constrained. This study investigates the dynamic relationship between green financing and climate change outcomes in Nigeria over the period 2000–2025, incorporating six control variables: GDP per capita, population, energy intensity, fossil fuel share, institutional quality, and financial development. Grounded in the Environmental Kuznets Curve (EKC) hypothesis, the Pollution Haven Hypothesis, and Modern Portfolio Theory as adapted for sustainable finance, the study employs an Autoregressive Distributed Lag (ARDL) bounds testing approach, complemented by the Fully Modified Ordinary Least Squares (FMOLS) estimator and a suite of post-estimation diagnostics. The results reveal that green financing exerts a statistically significant negative effect on carbon dioxide emissions, the primary proxy for climate change outcomes, both in the short run and long run, affirming its role as a credible decarbonisation instrument. Fossil fuel share and energy intensity are found to be the most potent drivers of emissions, while institutional quality and financial development serve as critical moderating factors that either amplify or constrain the efficacy of green financing. GDP per capita exhibits an inverted-U relationship with emissions, consistent with EKC predictions, although Nigeria has not yet reached its turning point. Population growth exerts a significant positive pressure on emissions, reinforcing the urgency of demographic-sensitive climate policy. The findings have profound implications for policymakers, development finance institutions, and private capital mobilisers seeking to scale climate-aligned investment in Sub-Saharan Africa's largest economy. This study contributes original empirical evidence to the thin body of country-specific green finance literature on Nigeria and offers actionable policy recommendations.

• Zenodo https://zenodo.org/records/20516277first seen 2026-06-03 04:21:41 · last seen 2026-06-03 04:21:50