Revisiting the environmental Kuznets curve in the Nigerian agricultural sector a disaggregated analysis of subsectors green energy finance and urbanization

The agricultural sector (AGS) is pivotal to Nigeria’s economic stability and development but is a major source of greenhouse gas (GHG) emissions, creating a fundamental tension between green growth and environmental quality (ENQ). While prior studies assume an inverted-U Environmental Kuznets Curve (EKC), this study tests for and provides empirical evidence of a more complex N-shaped trajectory for carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O) emissions, where degradation rebounds at higher income levels. To achieve the Paris Agreement and Sustainable Development Goals, Nigeria faces the challenge of balancing AGS productivity with ENQ due to rapid urbanization, inconsistent green finance investment in renewable energy (REN) adoption, and lax ENQ regulations that exacerbate climate risks. In contrast to prior studies assessing AGS as a homogenous sector, this study moves beyond the assumption of an inverted-U Environmental Kuznets Curve (EKC) to test for the possibility of an N-shaped trajectory in which emissions rebound at higher income levels. We adopted the autoregressive distributed lag (ARDL) model to disaggregate AGS into crops, livestock, forestry, and fisheries to assess the divergence in their influence on the ENQ. The results indicate evidence of an N-shaped EKC, where economic growth initially degrades ENQ, then temporarily improves it, and subsequently exacerbates ENQ degradation at higher income levels due to fossil fuel dependency, laxity in ENQ regulations, and unchecked urban sprawl. REN adoption improved ENQ by reducing CO₂ (29.1%) and N₂O (33.2%), but not CH4 from livestock. Urbanization degrades ENQ by increasing emissions (CO₂: 20.3%; CH₄: 21.5%). This study recommends targeted interventions for high-emitting subsectors to improve livestock feed, precision fertilization, and scale-up REN infrastructure with stringent urban planning and green incentives. In addition, a multi-sectoral approach is critical for reconciling agricultural productivity with Nigeria’s net-zero ambitions.