The Interplay Of Renewable Energy, Institutional Quality, And Consumption-Based Co₂ Emissions: An Empirical Analysis Of Nigeria

Abstract

This study examine the mediating effect of institutional quality on the relationship between renewable energy and consumption-based co₂ emissions in Nigeria. The study utilizes Autoregressive Distributed Lag Model (ARDL) using a time series data from 1996 to 2024. The results show that institutional quality plays a crucial role in strengthening the effectiveness of renewable energy in reducing CO₂ emissions in the long run. Strong institutions ensure better governance, regulatory frameworks, and policy enforcement, which enhance the efficiency of renewable energy projects. Furthermore, the short run interaction term between renewable energy and institutional quality has a negative but statistically insignificant coefficient the negative sign suggests that higher institutional quality may still enhance the effectiveness of renewable energy in reducing CO₂ emissions. The study recommends that, Nigeria should strengthen institutional frameworks, improve policy implementation, and invest in renewable energy infrastructure in order to achieve sustainable emissions reduction. In addition, the long-term benefits of renewable energy can be amplified by addressing governance challenges, improving regulatory enforcement, and ensuring transparency in the energy sector.