Abstract
The main objective of this study is to examine the impact of energy consumption and environmental degradation (CO2 emissions) on economic growth in Bangladesh covering the periods of 1972 to 2018 by employing the Johansen cointegration test, VECM approach, and Granger causality test. The Johansen cointegration result indicates that gross capital formation (GCF), labor, Electricity power consumption (EPC), energy consumption (EC) has a positive and statistically significant effect on economic growth (RGDP) while environmental degradation (carbon dioxide emissions) has an inverse effect on it. The results of VECM show that there exists a long-run causal nexus among the variables and there is short-run causality running from the capital formation and electricity power consumption to the economic growth while there is no short-run causality from the labor, energy consumption, carbon emission to the economic growth. The causality test shows that there exist a unidirectional causal relationship from economic growth to labor, EPC to RGDP, GCF to labor, EC to GCF, carbon emissions (CO2) to GCF, labor to EPC, EC to labor, CO2 to labor, and carbon emissions to EPC and a bi-directional causal nexus between GCF and RGDP; GCF and labor; EPC and carbon emission in Bangladesh. However, the study suggests that a huge change of low carbon advancements like renewable energy and energy sufficiency may contribute to decrease emissions and thus support the long-run economy.Keywords: Economic Growth; Electricity; Energy Consumption; Environmental Degradation; Vector Error Correction ModelJEL Classifications: E31; K32; Q53DOI: https://doi.org/10.32479/ijeep.11381
Highlights
Energy consumption is essential to all human well-being and economic activities for the expansion and development of a country
The variables of uses in this study are real Gross Domestic Product (GDP) per capita is proxy by economic growth, Electricity power consumption, Energy consumption and capital is intermediary by the gross capital formation and labor is proxy by total labor force and environmental degradation is proxy by carbon emission (CO2)
This study examines the impact of energy usage and CO2 emissions on economic growth in Bangladesh between 1972 and 2018
Summary
Energy consumption is essential to all human well-being and economic activities for the expansion and development of a country. The supplied energy is a precondition for poverty mitigation and the accomplishment of the sustainable improvement goals. The more is the consumption of energy, the more would be the emission of carbon dioxide resulting from the consumption of energy as the petroleum derivative Gas) establishes very nearly 70% of energy utilization while the sustainable power source goes about as a negligible role. Global warming problem soaring anxiety for the partial source of nonrenewable resources especially energy and becomes an emerging pattern move on the green economy, the connection between economic process and counter-productive natural discharge coming about because of carbon outflow captivates the attention to investigator, scholar, and strategy producer.
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