Energy consumption, inter-fuel substitution and economic growth in Nigeria

Boqiang Lin () and Philip Atsagli

Energy, 2017, vol. 120, issue C, 675-685

Abstract: Nigeria's energy mix has been dominated by petroleum with a year on year increase due to huge petroleum subsidy by the government. This study adopts the translog production function to investigate the potential for inter-factor and inter-fuel substitution between capital, labor, petroleum and electricity. Ridge regression has been adopted to estimate the model's parameters due to evidence of multicollinearity in the data. The results show that all input pairs are substitutes; and as such, adopting competitive pricing policies and removal of petroleum subsidies and price ceilings would redirect industries towards an increased use of electricity and increase capital and labor intensiveness. In addition, the study shows that a 5% and 10% increase of investment in petroleum reduction technologies for the period 2010, 2011 and 2012 would reduce CO2 emissions by 1.13518, 1.8554, 1.2722 and 2.27119, 2.37109, 2.49444 million metric tons respectively. Furthermore, the study points to evidence for convergence in relative technical progress among the various input pairs with electricity registering the fastest rate. These imply that petroleum would gradually lose its dominance in Nigerian energy mix.

Keywords: Energy economy; Energy substitution; Factor substitution; Nigeria (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544216317704
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:120:y:2017:i:c:p:675-685

DOI: 10.1016/j.energy.2016.11.115

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().