Impact of asset intensity and other energy-associated CO2 emissions drivers in the Nigerian manufacturing sector: A firm-level decomposition (LMDI) analysis
Fidelis I. Abam, Oliver I. Inah, Bethrand N. Nwankwojike
Abstract
The study considered the impacts of asset intensity and other energy-associated CO 2 emissions drivers in the Nigerian manufacturing sector from 2010 to 2020. The Logarithmic Mean Divisia Index (LMDI) was used to explore the driving factors of CO 2 emissions: asset intensity, economic output, economic structure, energy intensity, energy mix, and carbon emission coefficient. From the results, the CO 2 emissions decreased from 7.49 MtCO 2 in 2010 to 3.22 MtCO 2 in 2020. Furthermore, among the emissions drivers, the energy mix effect increased CO 2 emissions by 0.50 MtCO 2 , followed by asset intensity (0.29 MtCO 2 ) and economic structure (0.11 MtCO 2 ) . The energy intensity, economic output, and emission coefficient effects inhibited CO 2 emissions by −4.64 MtCO 2 , −0.42 MtCO 2 , and −0.01 MtCO 2 respectively. The contribution of the subsectors' emissions shows that the Other Manufacturing subsector emitted 14.62 MtCO 2 , while Chemical and Pharmaceutical emitted 14.61 MtCO 2 , Food, Beverages and Tobacco, 7.55 MtCO 2 , Textile, Apparel, and Footwear, 6.63 MtCO 2 , Basic Metal and Iron and Steel, 5.15 MtCO 2 , Plastic and Rubber Products, 2.99 MtCO 2 , Agro-Allied, 2.71 MtCO 2 , Oil Refining, 2.01 MtCO 2 , and Pulp and Paper Products, 1.76 MtCO 2 . The results indicated that the effect of asset intensity on emission growth is significant and should not be overlooked. Likewise, the effects of CO 2 emission drivers were found to impact differently across the subsectors. The latter suggests that firm-specific indicators in the respective subsectors should be one of the primacies during policy development since the driving factors of CO 2 emissions fluctuate across the subsectors.