The Impact of Innovation on Renewable Energy Consumption in Nigeria
UMOEKA, Emaediong Udeme
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This study investigates the impact of innovation on renewable energy consumption in Nigeria using a time series data of 1996Q1- 2017Q4. The data on renewable energy consumption, GDP, innovation, carbon dioxide emissions, trade openness and oil rent were obtained from world development indicators 2018. The impact of innovation on renewable energy consumption effect was estimated with dynamic ordinary least square model. This study employed the vector autoregressive model of Toda and Yamamoto causality test to examine the causal and long-run relationship among the variables; renewable energy, GDP, innovation, carbon dioxide emissions, trade openness and oil rent. From the study, the empirical result indicated that for objective one, GDP, Innovation and trade openness had a positive relationship with the dependent variable renewable energy consumption while, CO2 emission and Oil rent had a negative relationship with renewable energy consumption. The result of objective two indicated no causality among the variables however, there was a unidirectional causality from oil rent to renewable energy consumption and also a unidirectional causality from innovation to carbon dioxide emission. As a result of the findings the study recommends, expansionary monetary and fiscal policies to increase GDP which will in turn increase renewable energy consumption, increase investment in innovation, environmental policies like emission tax per ton of CO2 and emission allowance should be promoted, in order to force companies to either reduce their CO2 emission or pay heavily for it, liberalized trade policies to enhance trade openness and finally government should implement market policies such as subsidy, tax holiday, low import duties on renewable energy sources in order to enhance its generation, deployment and consumption.