Nexus between household energy consumption and economic growth in Bangladesh (1975–2018)

Abstract

Bangladesh, a climate-vulnerable country, has taken initiatives to reduce greenhouse gas emissions. The country's most significant challenge to achieving that goal is keeping economic growth even after ensuring commercial and residential energy for its people, primarily dependent on fossil fuel. This research investigates the residential electricity and gas consumption and its effect on Bangladesh's economic growth with the data period 1975–2018. Household energy consumption is one of the critical factors for sustainable economic growth, although it is not directly converted to the country's manufacturing output. Autoregressive Distributed Lag (ARDL) bound testing approach has been used due to the robust and better performance in this study with the smaller size of the sample. The country's labor-intensive economy has been found with a unidirectional relationship from household electricity consumption and population growth, which stresses the significance of ensuring electricity for all. Therefore, the country cannot take the energy conservation policy right now as it could obstruct its growth. However, energy sources might be replaced with renewable energies to meet the country's residential energy demand.