EFFECT OF URBANIZATION AND INDUSTRIALIZATION ON ENERGY USE
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EFFECT OF URBANIZATION AND INDUSTRIALIZATION ON ENERGY USE
Chapter one
INTRODUCTION
1.1 Background of the Study
Underdeveloped and developing countries continue to prioritise economic growth and development. It is the transformation of national attitudes, the structure and method of production, and the distribution of output that results in an increase in standard of living.
According to Wilson (2002), industrialization began in the 18th and 19th centuries, with the industrial revolution. This period was distinguished by the invention of machines, the establishment of factories, and other industrial innovations of the time.
Industrialization is the foundation of economic growth, as the process of economic development is typically initiated with industrialization and is impossible without it.
The pursuit of industrialization by developing economies is based on theoretical and empirical evidence that developing countries are highly industrialised.
Industrialization and economic growth are inextricably linked since it allows for significant technological advancement, on-the-job training, and productivity gains, all of which lead to pay increases.
Furthermore, it results in greater backward and forward linkages, a more stable and easily controllable production process than agriculture, and the best conditions for growth occur when industry and agriculture are in balance.
Industrialization is the process of changing raw materials into consumer goods, production goods, and services using both capital and human resources (Amechi and Azubuike 2004).
Today, nations are divided into two categories: industrialised and unindustrialized. Developed nations are typically industrialised nations with extremely high output levels. Industrialization has a knock-on effect on all other economic activity sectors as well as the overall economy.
As urbanisation and manufacturing continue to grow in emerging economies, it is unclear how these two aspects of modernization will affect energy consumption. This is particularly concerning in emerging economies where urbanisation and industry are quickly increasing.
Between 1980 and 2008, urbanisation in Ghana increased from 67.4 percent to 85.6%, whereas urbanisation in South Africa more than doubled, from 19.6 percent to 43.1 percent. If urbanisation and industrialization have a substantial impact on energy demand, it will have consequences for sustainable development.
For example, if urbanisation and industrialization increase energy consumption, forecasting models that do not account for these socioeconomic variables may significantly underestimate future energy needs, making achieving sustainable development goals more challenging.
The link between energy consumption and sustainable development is particularly clear when considering the influence of energy use on greenhouse gas (GHG) emissions.
Because energy production, distribution, and use account for 61.4 percent of worldwide GHG emissions (Baumert et al. 2005), any serious effort to reduce greenhouse gas emissions must focus on reducing fossil fuel usage while increasing renewable energy consumption.
1.2 Statement of Problem
There is an underlying belief that not all sectors are equally crucial for economic progress. The idea that economic growth is dependent on the expansion of a core sector was formalised in an eighteenth-century physiocratic analysis of agricultural output production and distribution, and it has survived in various forms ever since. Many analytical research have focused on the role given to industrialization.
The above thought may have been what motivated or fueled successive Nigerian governments’ efforts to promote industrial activities, which contribute significantly to economic growth through job creation, increases in foreign exchange earnings, the acquisition of both semi- and highly specialised skills, the minimization of the risk of complete foreign dependence, and resource utilisation.
The drive to industrialise began in the pre-colonial period. During the post-independence period of the 1960s, the government’s policy of import substitution gained popularity, and following the civil war of the 1970s, vast amounts of foreign cash streamed in from crude oil exports, allowing the government to invest directly in manufacturing.
The import substitution policy was followed by the indigenization policy, which attempted to give Nigerians complete control over many of the country’s businesses.
The government has also implemented other methods and incentives, such as export promotion, tax breaks, tariff reductions, loan assistance, and so on.
During these efforts, industries such as crude petroleum and natural gas accounted for a significant portion of foreign exchange earnings and nationally collected revenue.
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