Role of economic growth, urbanization and energy consumption on climate change in Bangladesh

Abstract

The present study empirically analyzes the impact of energy consumption, such as oil, gas, coal, gross domestic product, and urbanization, on environmental degradation in the form of CO2 emissions. The study objective is to identify the long-run and short-run interrelationships among the six key variables. The investigation is based on the time-series yearly data for the period of 1980–2020. We tested the stationarity for the variables using the Augmented Dickey-Fuller test and applied the Autoregressive Distributed Lag bounds model to investigate the cointegration relationship between the variables. The study also examined the short and long-run relationship to identify the variables’ causality impact over time. The results conclude that: (i) overall energy consumption and GDP have a unidirectional causality with CO2 emission in the long and short-run, which confirms that energy, economic growth and urbanization have an increasing impact on carbon emissions, (ii) the results also indicate for a short-run causality from energy, economy and urbanization and to CO2 emissions, (iii) the urbanization has a negative impact in the short term because of the industrialization, and (iv) the results conclude that Bangladesh should take stringent actions to control the surging CO2 emissions. Following the above conclusion, we highlight a few policy implications for enhancing green development in Bangladesh.