GTAP Resources: Resource Display
| GTAP Resource #7428 |
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"Energy Transition, Energy Policy and Macroeconomic Performance in Nigeria: A Computable General Equilibrium Approach" by Fasanu, Eyitemi, Christiana Hassan, Henry Okodua and Abiola Akande Abstract Nigeria faces the challenge of reducing carbon emissions while maintaining macroeconomic stability. As a signatory to the Paris Agreement, it has committed to reducing emissions by 20% unconditionally and 47% conditionally. However, the economic consequences of these commitments are uncertain, given the country’s reliance on fossil fuels. This study employs a Computable General Equilibrium model based on Nigeria’s 2018 Social Accounting Matrix to assess the macroeconomic implications of these targets between 2018 and 2030 under two policy scenarios. Under the 20% reduction scenario, Nigeria’s real Gross Domestic Product is projected to decline by 0.05349% by 2030, while the 47% scenario results in a sharper contraction of 0.06138%. The industrial sector, despite being among the least energy- and emissions-intensive, is the hardest hit, with value-added losses of up to 2.4728%. In contrast, agriculture demonstrates resilience, with marginal growth recorded in select years under the 47% scenario. Energy intensity declines across all sectors. Studies on South Africa’s and Indonesia’s energy transitions highlight the potential for long-term economic gains with adequate financial and technological support. However, Nigeria’s transition poses unique challenges due to weaker institutional frameworks and limited access to external funding, making economic costs more severe. Moreover, limited research exists on Nigeria’s specific transition, restricting a full understanding of the transmission mechanisms of its Energy Transition Plan. This study fills that gap, demonstrating that without foreign aid and strategic sectoral interventions, Nigeria’s economic decline under stringent emissions targets could surpass that of comparable economies. Policy recommendations include prioritizing international financial cooperation, attracting foreign investment, and implementing targeted subsidies for renewable energy and industrial energy efficiency. |
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- Climate change policy - Domestic policy analysis - Economic growth - Economic geography - Dynamic modeling - Africa (West) |
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Public Access  Paper (896.0 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
