This study examines Nigeria-South Africa economic activities in the context of climate change. Globally, drivers of economic performance are largely sensitive to climate change. The effects of climate change are not limited to developed economies. The developing countries have also been perturbed by the rising costs of environmental degradation on the different sectors of the economy, especially, the overall output performance of the economy. We attempt to examine the level of output growth with varying intensities of climate change over the period 1990–2021 in Nigeria and South Africa. We develop a time-varying transition Switching model characterized by two regimes. Using the Regime Switching Approach, emissions have increasing effects on output growth. The results from the two-regime process showed the impacts of economic activities in Nigeria and South Africa affect CO2 emissions differently. While changes in output production tend to contributes to CO2 emissions more in Nigeria, the converse is the case for South Africa. Further, the transition probability of output affecting emissions occurs and stayed longer in the second regime in both countries. Based on the findings, switching to renewable energy is important for both countries to foster economic growth while mitigating the long-term effects of CO2 emissions. Policy transmission mechanism needs be strengthen in Nigeria for policy effectiveness. If South Africa sustained the present drive towards renewable energy drive and policy articulation, mitigation efforts will be achieved rapidly. Finally, energy transition is paramount to the attainment of the 2030 agenda for sustainable development.
Keywords: Economic growth, Climate change, Nigerian, South Africa, Regimes.
JEL classification: C01, C11, Q54, O47,
O. Johnson Adelakum, Gbenga Peter Sanusi & Matthew Onalo Agbawn (2024). Demand for Indigenous Systems of Healthcare in India: Multinomial Logit Estimation of the AYUSH Treatment and Medicine. Indian Development Policy Review, 5: 2, pp. 177-190.