Climate Adaptation, Regional Inequality and Sustainable Economic Growth in Nigeria

Abstract

Climate change and persistent regional disparities continue to pose significant challenges to achieving sustainable economic growth in developing economies. While a growing body of research has examined the individual effects of climate change or inequality on economic performance, few studies have integrated climate adaptation, regional inequality, and sustainable economic growth within a single empirical framework for a developing, climate-vulnerable economy such as Nigeria. This study addresses that gap by examining the relationship among these three dimensions over the period 1990–2024. The data were obtained from the World Bank's World Development Indicators, the Worldwide Governance Indicators, and reports of the Nigerian Climate Change Commission, and the analysis is grounded in Endogenous Growth Theory and Climate Justice Theory. The Autoregressive Distributed Lag (ARDL) bounds-testing technique was employed to estimate the short-run and long-run relationships among the variables, owing to its suitability for the time-series properties of the data. To ensure comparability, the climate adaptation and spatial inequality indices were standardised using z-score transformation prior to estimation. The empirical findings indicate that climate adaptation, governance quality, and trade openness exert positive and statistically significant effects on sustainable economic growth, with the long-run effect of climate adaptation (0.62) exceeding its short-run effect (0.28), confirming that sustained adaptive capacity yields cumulative benefits. Conversely, regional inequality and carbon emissions exert significant negative effects, with the adverse influence of inequality intensifying over the long run (−1.88). The positive coefficients on GDP per capita and its squared term further indicate that Nigeria has not yet reached the turning point of the Environmental Kuznets Curve. These findings suggest that strengthening adaptive capacity, alongside deliberate efforts to reduce regional inequality, is essential for advancing sustainable economic growth. The study accordingly recommends greater investment in climate-resilient infrastructure, renewable energy development, and balanced regional development to promote inclusive and sustained growth, in line with SDGs 8, 10, and 13.