Climate Change and the Future of Nigeria's Oil-Dependent Economy

Abstract

The global shift towards sustainable energy sources, driven by international climate agreements and the imperative to reduce carbon emissions, presents significant challenges for oil-dependent economies like Nigeria. This paper examines the implications of climate change on Nigeria's economy, which relies heavily on oil exports for government revenue and foreign exchange earnings. The anticipated decline in global oil demand, resulting from the transition to renewable energy, threatens to exacerbate Nigeria's economic vulnerabilities, including reduced public spending capacity and increased unemployment in the oil sector. As global commitments to mitigate climate change intensify, Nigeria faces heightened risks from declining oil prices and potential international regulatory pressures, such as carbon taxes on fossil fuel imports. These dynamics underscore the urgency for Nigeria to diversify its economy beyond oil. The paper explores the potential of Nigeria's renewable energy resources-solar, wind, and hydropower-as viable alternatives to oil. By investing in renewable energy infrastructure, Nigeria can not only reduce its dependency on oil but also address its significant energy access challenges, thus fostering economic resilience.