Paper short abstract:

Negative externalities, as a result of corporate and individual’s activities, is increasing the rate of environmental problems being experienced in Africa. This continues to raise concerns for policy makers and experts towards achieving sustainable development goals, hence the need for this paper.

Paper long abstract:

Economic growth depends on public fund. This is because the long run effect of government spending results in the growth of the economy. One of the major problems faced by the Nigerian economy as shown in literature is governments’ inabilities to meet capital expenditures and recurring government deficits due to oil price volatility in the international market, leading to poor economic growth. Negative externalities as a result of corporate and individuals’ activities are increasing the rate of environmental hazards such as carbon emission currently being experienced in Nigeria. This problem continues to raise concerns for policy makers in achieving sustainable development goals. Hence, there is the need for a policy that would discourage emission and at the same time generate revenue to the government. To this extent, the study will examine the effect of carbon emission tax on economic growth of Nigeria.

The Dynamic Computable General Equilibrium Model (DCGEM) will be employed. The population will include 11 sectors in the economy. Validated data in form of Social Accounting Matrix (SAM) 2014 will be used. The instrument had been used in other policy decisions signed by the Federal Government which made it to be reliable.

The study will conclude whether carbon tax is appropriate and if it will guarantee better economic growth, social welfare, revenue to government and reduction in carbon emission. The study will recommend what need to be done to the government and what the government should use revenue generated from carbon emission tax for.