Abstract Circular economy is one effective strategy to achieve a healthy environment and efficient use of resources. In this study, the trade relationship between China and Nigeria is used to establish how circular economy ameliorates climate change. On the basis of CO2 emissions, data from 1991 to 2014 are obtained and measures for energy efficiency in the mining and extractive-related sectors from energy intensity are derived using Fisher ideal index decomposition. This study utilizes panel-corrected standard error, feasible generalized least squares, autoregressive distribute lag bound, and Bayesian VAR models. These techniques suggest that energy efficiency in the mining and extractive-related sector and the circular economy have not translated into CO2 emission reduction in both countries. However, economic growth, energy use (non-renewable energy), and clean energy substitution (renewable energy) are essential factors in mitigating CO2 emissions. Given such evidence, resource melioration for energy consumption and economic growth have indispensable roles in reducing CO2 emissions.