THE EFFECT OF ENVIRONMENTAL TAX POLICIES ON SUSTAINABLE ECONOMIC DEVELOPMENT IN NIGERIA

This study investigated the effect of environmental tax policies on sustainable economic development in Nigeria, focusing on environmental sustainability, green economic growth, and sustainable public revenue generation and utilization. A cross-sectional survey research design was adopted, and structured questionnaires were distributed to stakeholders in taxation, public finance, and economic development across the thirty-six states of Nigeria and the Federal Capital Territory (FCT), Abuja. Of the 555 questionnaires distributed, 528 were returned and analysed, yielding a response rate of 95.1%. A multi-stage sampling technique was employed, combining nationwide coverage with purposive selection of professionally relevant respondents. Data were analysed using descriptive statistics and multiple regression analysis at the 5% level of significance. The findings revealed that the three environmental-tax-policy dimensions jointly had a significant positive relationship with sustainable economic development in Nigeria. Based on the internally reconciled ANOVA sums of squares, the model explained approximately 71.1% of the variance in sustainable economic development (R² = 0.711). The individual standardized effects of environmental sustainability (β = 0.196, p < 0.001), green economic growth (β = 0.301, p < 0.001), and sustainable public revenue generation and utilization (β = 0.231, p < 0.001) were positive and statistically significant, with green economic growth exerting the strongest influence. The study concludes that environmental taxation can support both environmental protection and sustainable economic development in Nigeria, although its effectiveness is constrained by weak enforcement, limited institutional capacity, and inadequate public awareness. It recommends stronger environmental tax administration, greater transparency in revenue utilization, institutional capacity building, and sustained public awareness to improve compliance and developmental impact.