Impact of Public Expenditure on Climate Change in Nigeria: Lessons from South Africa

Abstract

This paper examines the role of public expenditure in enhancing climate change adaptation and mitigation in Nigeria. It examines the trend of carbon dioxide (CO2) in Nigeria alongside those of South Africa and Sub Saharan Africa and investigates the statistical relationship between public expenditure and climate change in Nigeria. The paper hinges on the Climate Public Expenditure and Institutional framework of the Oversee Development Institute (ODI), which argues that climate change, has fiscal implications and can be addressed using national plans and annual budgets. Time series data were then collected for emission, public expenditure, human development index and economic growth from the World Bank and the Central Bank of Nigeria for 1970-2008, while trend analysis and lag regression model were used for data analysis. It was found that public expenditure towards economic services could be used to enhance Nigeria’s climate change mitigation and adaptation strategies. Though economic growth and human development index were found to be positively related to emission, results imply that economic growth in Nigeria is not pursued in a sustainable manner that accounts for the future generation. The paper recommends that economic growth that is driven by investment in renewable energy, developing human capacity to adapt to climate change and coordinating public expenditure to economic and community services to develop rural communities and vulnerable sectors like agriculture, would be useful for addressing climate change in Nigeria and ensuring sustainable development. A lesson Nigeria can learn from climate change mitigation and adaptation measures in South Africa is to identify and prioritize short term and medium term adaptation interventions to be addressed in sector plans such as water, agriculture and forestry, health, biodiversity and human settlements.