Abstract
The study examines the linear and nonlinear relationships between per capita carbon dioxide emissions, per capita real GDP, energy consumption, financial development, foreign direct investment, trade openness, urbanization, agriculture, and industry sectors as potential determining factors of CO<sub>2</sub> emissions in the perspective of Bangladesh all through 44 years, starting from 1974. The study also considers the CO<sub>2</sub> emissions from the selected South Asian countries over the period from 1978 and 2018. The study uses three cointegration approaches. First, we employ linear cointegration method and find that crucial determining factors of CO<sub>2</sub> emissions in Bangladesh are real GDP per capita, energy consumption, and urbanization. Then, we apply the nonlinear cointegration method and find that energy consumption and foreign direct investment have asymmetric impacts on carbon release in the long run. While energy consumption, financial development, and FDI have asymmetric influence in the short run. Finally, we apply a panel cointegration test to compare Bangladesh with other South Asian countries in terms of CO<sub>2</sub> emissions. The estimated results disclose that the vital contributing factors of CO<sub>2</sub> emissions in selected South Asian countries are real GDP, energy consumption, financial development, and urbanization. Our results show that energy consumption, financial development, and urbanization upturn CO<sub>2</sub> emissions, while trade openness lowers emissions. We claim that our results are consistent with the EKC hypothesis for both in Bangladesh and selected South Asian countries. The three cointegration estimation findings disclose that urbanization will deteriorate environmental worth in Bangladesh and selected South Asian countries in the long run.
Highlights
Global warming, the long-term upsurge of the average global surface temperatures, is the major problem of humankind
After we find a long-run association depended on F- test, the step is to assess error correction model (ECM) of ARDL that re-introduces the information lost during the differencing operation, thereby integrating the short-run adjustments with long-run equilibrium
We divide our model into six specifications to observe the impact of every individual exogenous variable on carbon emissions using the same lag for each variable
Summary
The long-term upsurge of the average global surface temperatures, is the major problem of humankind. An IPCC special report 2018 discloses that human-initiated warming stretched just about 1°C higher in 2017 than pre-industrial stage, rising at 0.2°C each decade. The report cites that warming above the global average has been perceived in many different areas and different seasons; higher average warming is experienced over the land than over the ocean. In accordance with World Bank Group [81], Bangladesh will be one of the most affected countries in South Asia by global warming with increasing sea surface and devastating tropical storms endangering cultivation, livelihood, and infrastructure. Industrial development, fossil fuel vehicles, and household appliances have accelerated the rising demand for energy that causes increasing carbon emissions
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