Title: Modelling the impact of energy production on environmental quality of resource-rich countries

Authors: Austine N. Okereke; Nancy Zigwai Yunana; Seyi Saint Akadiri; Joseph Osaro Denwin

Addresses: Research Department, Central Bank of Nigeria, Abuja, Nigeria ' Research Department, Central Bank of Nigeria, Abuja, Nigeria ' Advanced Research Center, European University of Lefke, Lefke, Northern Cyprus, TR-10 Mersin, Turkey ' Department of Economics, University of Portharcourt, Rivers State, Nigeria

Abstract: This study examines the influence of energy production on environmental degradation in resource-rich countries, utilising the pooled mean group (PMG) estimator technique spanning from 1995 to 2021. Our analysis revealed that while energy production does contribute to CO₂ emissions, its impact was statistically insignificant. This suggests the potential for implementing advanced and environmentally friendly techniques in the production process. Furthermore, the study suggests that the bulk of emissions in oil-producing countries may stem from sources other than energy production, such as oil extraction itself. Our findings support the halo effect hypothesis (HEH), indicating that foreign direct investment (FDI) is associated with a reduction in CO₂ emissions in the sampled region. Considering these results, policymakers should prioritise environmentally friendly policies to attract FDI inflows in countries like Nigeria. This includes encouraging investors to embrace green energy technologies and align their investments with the country's emission reduction targets. [Received: May 18, 2023; Accepted: May 8, 2024]

Keywords: energy production; environmental quality; foreign direct investment; FDI; time series; Nigeria; pooled mean group; PMG; halo effect hypothesis; HEH.

DOI: 10.1504/IJOGCT.2025.147308

International Journal of Oil, Gas and Coal Technology, 2025 Vol.38 No.1, pp.134 - 149

Received: 16 May 2023
Accepted: 08 May 2024
Published online: 14 Jul 2025 *

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