Effect of Economic Growth on the Environment in Bangladesh

Abstract

The objective of the study is a practical investigation of the Environmental Kuznets Curve (EKC) hypothesis in the case of Bangladesh. Data used is from 1986 to 2014. Data has been collected from the official world bank databank website. The autoregressive distributed lag (ARDL) approach will be used for the short-run analysis and a vector error correction model (VECM),a bounds test for cointegration will be used to find the long-run relationships. We will be examining the dynamics between economic growth, foreign direct investment, and energy consumption with carbon dioxide emissions in Bangladesh. We find that income has a very modest negative effect on the environment and pollution in the long run. Energy consumption is discovered to be a bigger contributor to carbon dioxide emissions in the country, especially in the short run. In the case of FDI inflow, the relationship is found to be negative with environmental degradation, but in the long ,haul the value does gravitate towards a positive link, however negligible.