Nexus between carbon emissions, economic growth, renewable energy use, and technological innovation towards achieving environmental sustainability in Bangladesh

Abstract

Global climate change caused by Greenhouse gases (GHGs), particularly carbon dioxide (CO2) emissions, poses incomparable threats to the environment, development, and sustainability. This research investigates the potential of economic growth, renewable energy use, and technological innovation to achieve environmental sustainability by reducing CO2 emissions in Bangladesh. Time series data from 1980 to 2019 were utilized by applying the autoregressive distributed lag (ARDL) bounds testing approach followed by the Dynamic Ordinary Least Squares (DOLS) method. The DOLS estimate findings show that the long-run coefficient of economic growth is positive and significant with CO2 emissions, indicating a 1% increase in economic growth is related to a 1.3% rise in CO2 emissions. Furthermore, the coefficient of renewable energy use is negative and significant, which indicates that increasing renewable energy use by 1% is associated with CO2 emissions reduction by 0.15% in the long run. In addition, the estimated long-run coefficient of technological innovation is negative but not significant, implying that a 1% increase in technological innovation results in a 0.07% reduction in CO2 emissions. The empirical findings reveal that economic growth increases CO2 emissions in Bangladesh while increased renewable energy use and technological innovation help to achieve environmental sustainability by reducing CO2 emissions. The estimated results are robust to alternative estimators such as fully modified least squares (FMOLS) and canonical cointegrating regression (CCR). In addition, the pairwise Granger causality test is utilized to capture the causal linkage between the variables. This article provides policy recommendations aimed at a low-carbon economy, promoting renewable energy use, and financing technological advancement, to achieve emission reduction and environmental sustainability in Bangladesh.