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Does agricultural value added induce environmental degradation? Empirical evidence from an agrarian country

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Abstract

This study empirically investigates the agriculture-induced environmental Kuznets curve (EKC) hypothesis in an agrarian framework. Annual time series data from 1981–2014 was employed using augmented Dickey–Fuller and the Phillips–Perron (PP) unit root test complemented by the Zivot and Andrews unit root that accounts for a single structural break to ascertain stationarity properties of variables under consideration. For the cointegration analysis, an autoregressive distributive lag methodology and the recent novel Bayer and Hanck combined cointegration technique are employed. For the direction of causality, the Granger causality test is used as estimation technique. Empirical findings lend support for the long-run equilibrium relationship among the variables under consideration. This study also validates the inverted U-shaped pattern of EKC for the case of Nigeria, affirming that Nigeria remains at the scale-effect stage of its growth trajectory. Further empirical results show that foreign direct investment attraction helps mitigate carbon emissions in Nigeria. Based on these results, several policy prescriptions on the Nigeria energy mix and agricultural operations in response to quality of the environment were suggested for policymakers, stakeholders, and environmental economists that formulate and design environmental regulations and strategies to realise the goal 7 of sustainable development (SDG).

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Notes

  1. Additional details regarding the survey on EKC hypothesis are available in the studies of Kijima et al. (2010) and Pasten and Figueroa (2012).

  2. For want of space, Tables 7 and 8 diagnostic test results can be made available upon request. Both estimations passed all diagnostic tests.

Abbreviations

EKC:

environmental Kuznets curve

ADF:

augmented Dickey–Fuller

PP:

Phillips–Perron

ZA:

Zivot and Andrews

ADRL:

autoregressive distributive lag

GHG:

greenhouse gas

CO:

carbon monoxide

CO2 :

carbon dioxide

SAP:

structural adjustment program

BH:

Bayer and Hanck

NAFTA:

North American Free Trade Agreement

GDP:

gross domestic product

UECM:

unrestricted error correction model

AIC:

Akaike information criterion

SIC:

Schwarz information criterion

HQ:

Hannan Quinn information criterion

FPE:

final prediction error

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Authors and Affiliations

  1. Finance and Banking Department, College of Business Dar Al Uloom University, 1 Mizan St., Al Falah, Riyadh, 13314, Saudi Arabia

    Mary Oluwatoyin Agboola

  2. Eastern Mediterranean University, via Mersin 10, Northern Cyprus, Turkey

    Festus Victor Bekun

Authors
  1. Mary Oluwatoyin Agboola
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  2. Festus Victor Bekun
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Correspondence to Festus Victor Bekun.

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Agboola, M.O., Bekun, F.V. Does agricultural value added induce environmental degradation? Empirical evidence from an agrarian country. Environ Sci Pollut Res 26, 27660–27676 (2019). https://doi.org/10.1007/s11356-019-05943-z

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