THE ROLE OF ENVIRONMENTAL TAXES IN ENVIRONMENTAL SUSTAINABILITY IN NIGERIA

Abstract

The paper examines the role of environmental taxes and the feasibility of their adoption by the Nigerian government as a panacea for environmental degradation and a tool for the realisation of the Sustainability Development Goals (SDGs) with respect to environmental sustainability. Methodologically, the paper employed a conceptual and literature review approach, relying on the postulations and outcomes of prior published articles and reports. The reviewed literature covered primarily the empirical studies conducted between 2015 and 2023, obtained primarily from ResearchGate, ScienceDirect, SSRN, and Emerald journal databases. The paper, which is rooted in the double dividend theory, found that although environmental taxes are gradually gaining momentum in Nigeria, the long-existing anti-gas flaring laws and penalties are weakly enforced and appear not to have deterred the gas-flaring companies. The paper concludes that, in principle, the implementation of environmental taxes would exert a strong positive impact on environmental sustainability and that Nigeria stands to gain from it in line with the double dividend hypothesis. However, in practice, it appears evident that the Nigerian authorities currently employ a similar practice in the form of gas flaring penalties, but it is weakly implemented. The paper recommends, among others, the need for an explicit carbon and environmental tax regime in Nigeria, where there will be a legislatively specified amount of tax payable per cubic metre of CO2 emissions by all companies that emit carbon, not just the oil and gas companies. The paper also provides suggestions for further studies.