The Asymmetric Effects of Climate Change on Health Expenditures in Nigeria: Evidence from Nonlinear ARDL Model

Introduction: This study demonstrates the asymmetric impacts of climate change on Nigeria's health expenditures. Climate change has been acknowledged as one of the greatest environmental challenges facing the globe and posing serious threat to human health. The increasing prevalence of climate-sensitive diseases across the world today is largely as a result of environmental degradation. The climate shocks and the associated extreme weather conditions have imposed greater challenges on human health, leading to increase in government and household health expenditures. Method: A time series analysis was conducted using non-linear autoregressive distributed lag (NARDL) approach in conjunction with Granger causality test over the period spanning from 1990 to 2023. We measure climate change using carbon emission (CO2) and temperature anomalies. To ascertain the possible asymmetric effects of the variables, we decompose carbon emission (CO2) and temperature anomaly into positive and negative partial sums. Results or Findings: Findings show that positive temperature and CO2 shocks significantly increase costs in both short and long terms, highlighting the urgency for climate action. Conversely, negative CO2 shocks yield long-term health expenditure reductions, showcasing mitigation’s potential. The established unidirectional causality from CO2 emissions to per-capita health spending strengthens the case for targeted emission reduction policies. Discussion or Conclusion: The finding that a positive shock in temperature and CO2 significantly increases health expenditures underscores the urgent need for climate mitigation strategies.