Carbon Taxation, Energy Transition, and Environmental Revenue Neutrality in Nigeria: A Computable General Equilibrium Analysis

This doctoral study develops a computable general equilibrium analysis of carbon taxation design, energy transition dynamics, and the feasibility of revenue-neutral environmental tax reform in Nigeria. As a major oil producer and the most populous country in Africa, Nigeria faces an acute tension between carbon emission reduction commitments under the Paris Agreement and the fiscal and developmental imperatives of its oil-dependent economy. The study constructs a multi-sector, multi-household CGE model of the Nigerian economy, disaggregating energy production into oil, gas, coal, and renewable sub-sectors, calibrated to the most recent Nigerian Social Accounting Matrix. The model simulates the welfare, employment, output, and revenue effects of alternative carbon price trajectories from 2025 to 2040 under four revenue recycling scenarios: lump-sum household transfers, corporate income tax reduction, infrastructure investment, and a combination mechanism. Environmental revenue neutrality is tested by deriving the carbon price required to hold total tax revenue constant while meeting a defined emissions reduction target. The study expects to find that a revenue-neutral carbon tax combined with targeted household dividend payments produces the most favourable equity-efficiency tradeoff and generates political feasibility advantages in low-income household groups. It also anticipates that unaided carbon pricing without compensatory revenue recycling disproportionately burdens low-income northern households who rely on kerosene and firewood. Original contributions include the Nigeria-calibrated CGE model integrating PIA energy sector dynamics. Keywords: carbon tax, CGE model, energy transition, revenue neutrality, Nigeria.