Dealing with vulnerability to carbon emission from gas flaring: the roles of transparency and utilisation policies in Nigeria

Gas flaring, a practice described as environmentally damaging and financially wasteful, still persists on a large scale in the Nigerian oil and gas industry. Firstly, this paper investigates the vulnerability of the Nigerian economic performance to environmental pollution by estimating and analysing the relationship between carbon emission from gas flaring and Nigeria's GDP. Secondly, the study examines how transparency and gas utilisation policies, deployed by the country, are performing in dealing with vulnerability to carbon emission from gas flaring. The paper uses an autoregressive distributed lag bounds testing approach to cointegration and error-correction-based Granger causality. The paper establishes that carbon emission from gas flaring affects Nigeria's GDP negatively in both the short and long run. However, the results show that GDP has started exhibiting resilience to carbon emission from gas flaring in the long run. Findings imply that even though transparency and gas utilisation policies are doing well in increasing GDP's long-run resilience, persistent carbon emission from gas flaring continues to cause short-run and long-run economic vulnerability. The study discusses policy implications meant to be useful to the Nigerian government and the relevant regulatory authorities in the country's oil and gas industry.