ASSESSING THE POLLUTION HAVEN HYPOTHESIS IN NIGERIA: EVIDENCE FROM ARDL ANALYSIS OF CO₂ EMISSIONS AND ECONOMIC INDICATORS

This study investigated the validation of the pollution haven hypothesis (PHH) in Nigeria. The study used CO2 emissions as the key indicator of environmental pollution and considered relevant explanatory variables such as foreign direct investments, economic growth, financial development, and population growth to achieve its objective. Covering the time series data from 1990 to 2023, the Autoregressive Distributed Lag (ARDL) model was applied. The findings revealed a long-run cointegration between the considered variables, and the ARDL results validate the PHH in Nigeria. Foreign direct investment inflows contribute to the rising levels of CO2 emissions in Nigeria. In addition, financial development and per capita GDP reduce the levels of CO2 emissions, while population growth causes a rise in environmental degradation in the country. Based on the aforementioned findings, this study recommends that the government, policy-makers, industries, and interested parties of the country should apply and execute policies, laws, and regulations that will deter or punish polluting foreign multinational companies and other investments and encourage clean ones; since green finance is gaining popularity but not well established in most African countries, Nigeria inclusive, green financing systems should be initiated, sustained and implemented; establish preferential trading policies that will promote addition of value through clean technology; and practice carbon capture, usage, and storage for the country's environmental safety.