Modelling the connection between energy intensity, renewable energy, globalization, technological innovation and CO2 emissions: A Quantile–on–Quantile technique

Abstract

As Nigeria progresses towards reaching net‐zero emissions by 2060, it is crucial to identify the factors responsible for environmental deterioration and those that enhance ecological well‐being. It is equally significant to emphasize that Nigeria's economy is heavily dependent on fossil fuels, which have proven unsustainable and environmentally unsafe. As a result, this research investigates the impact of energy intensity (EINT), renewable energy consumption (RENC), globalization (GLOX), technological innovation (TINV) and carbon dioxide emissions (CO2) in Nigeria from 1990Q1–2019Q4. The methods employed include Quantile–on–Quantile (QQ) and non–parametric causality. The QQ method reveals that EINT has both positive and negative impacts on CO2, varying in magnitude from 3 to −5. Higher quantiles of RENC tend to influence CO2 positively, whereas the lower quantile has a negative impact. Negative shocks of GLOX on CO2 have less impact, with a maximum magnitude of −1 at the upper quantile of CO2. In contrast, the positive shocks seem to have a stronger impact and vary in magnitude. TINV has negative shocks across all quantiles. In addition, a significant causality is observed in the upper, middle and lower quantiles. This study suggests that policymakers should implement policies encouraging investments in renewable energy and green technologies.