Impact of CO<SUB align="right">2 emission, per capita income and HDI on Environmental Performance Index: empirical evidence from Bangladesh

Abstract

The Environmental Performance Index (EPI) is a wide ranging dimension of environmental parameters, which need to be assessed with different socioeconomic indicators with a view to inspect environmental sustainability of a growing economy like Bangladesh. The endeavour is given in this study to examine the short run and long run relationship between CO2 emission, Per Capita Income, HDI and EPI. Besides, the influence of selected variables on EPI has been ascertained by systematic econometric exercise. It is appeared in the estimation that, there is a cointegrating relationship between CO2 emission, Per Capita Income, HDI and EPI of Bangladesh. A long term associationship emerged among the cointegrated variables in further statistical sophistication and found causality is running form the explanatory variables to EPI; meaning that Per Capita Income, Human Development Index and CO2 emission has influence on Environmental Performance Index in the long run. Transitory effect analysis revealed no short run relationship between HDI, CO2 emission and EPI. Furthermore, multiple regression model signifies the negative association between EPI and Per Capita Income, marginal relationship between CO2 emission and EPI, and considerable impact on EPI by Human Development Index.