Vol. 1 No. 1 (2026): Lemmy Brooks Journal Vol. 1

Using annual Nigerian data (1981–2023), this study examines the long‑run and short‑run nexus between climate change and fiscal policy, with climate change proxied by per‑capita carbon dioxide emissions excluding land‑use change (World Development Indicators) and fiscal policy proxied by the general government consumption share of GDP and net taxes on products (Central Bank of Nigeria Statistical Bulletin). Given the presence of structural change in Nigeria’s macro‑fiscal environment, we combine break‑robust unit‑root testing (Zivot–Andrews) with the autoregressive distributed lag (ARDL) bounds approach to cointegration and a nonlinear ARDL (NARDL) specification that allows asymmetric fiscal shocks. Unit‑root tests indicate that the variables are integrated of order one, and bounds tests strongly support cointegration. In the baseline ARDL, the estimated error‑correction term is negative and statistically significant (–1.264), implying rapid adjustment to the long‑run equilibrium after shocks. Long‑run elasticities suggest that a higher government consumption share is associated with lower emissions. In contrast, a higher net‑tax share is associated with higher emissions, consistent with Nigeria’s oil‑linked tax base and the weak environmental content of most taxes. The NARDL results reveal important asymmetry: positive fiscal expansions (increases in the government consumption share) significantly reduce emissions in the long run, while fiscal contractions have smaller and statistically weaker effects. Dynamic multipliers confirm convergence to the estimated long‑run effects within a decade. Robustness checks using dynamic ordinary least squares support the emissions‑reducing role of government spending. The findings underscore the need to re‑orient fiscal policy toward climate‑compatible public spending, remove distortionary fossil‑fuel subsidies, and mainstream climate risks into Nigeria’s medium‑term fiscal framework.