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Is There an Environmental Kuznets Curve for Bangladesh? Evidence from ARDL Bounds Testing Approach

Author

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  • ISLAM, FARIDUL

    (Professor and Chair, Department of Economics, Morg an State University, Baltimore, MD21251, USA)

  • SHAHBAZ , MUHAMMAD

    (Assistant Professor of Economics, Department of Management Sciences, COMSATS Institute of Information Technology, Lahore.)

  • BUTT, MUHAMMAD SABIHUDDIN

    (Pakistan, and Applied Economic Research Centre, Karachi University, Pakistan.)

Abstract

The environmental Kuznets curve (EKC) hypothesis posits that in the early stages of economic growth environmental degradation and pollution increase. However, as a country reaches a certain level of income, the trend reverses postulating a relationship that produces an inverted U-shaped curve. Bangladesh has been recording remarkable rates of economic growth which, along with other factors, has raised the specter of a looming environmental crisis. This paper empirically investigates the EKC hypothesis for Bangladesh using data from 1971 to 2010 applying the Autoregressive distributed lag (ARDL) approach to cointegration for a long run relation and the Granger causality within the vector error correction model for the short run dynamics. The results show that energy consumption is a major contributor to CO2 emissions; trade openness lowers CO2 emissions, but urbanisation worsens it. Economic growth, energy consumption, trade, and urbanisation Granger cause CO2 emissions.

Suggested Citation

  • Islam, Faridul & Shahbaz , Muhammad & Butt, Muhammad Sabihuddin, 2013. "Is There an Environmental Kuznets Curve for Bangladesh? Evidence from ARDL Bounds Testing Approach," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 36(4), pages 1-23, December.
    • Handle: RePEc:ris:badest:0563
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    Cited by:

    1. Rauf, Abdul & Zhang, Jin & Li, Jinkai & Amin, Waqas, 2018. "Structural changes, energy consumption and carbon emissions in China: Empirical evidence from ARDL bound testing model," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 194-206.
    2. Carmen van der Merwe & Martin de Wit, 2021. "An In-Depth Investigation into the Relationship Between Municipal Solid Waste Generation and Economic Growth in the City of Cape Town," Working Papers 07/2021, Stellenbosch University, Department of Economics, revised 2021.
    3. Rahman, Mohammad Mafizur & Kashem, Mohammad Abul, 2017. "Carbon emissions, energy consumption and industrial growth in Bangladesh: Empirical evidence from ARDL cointegration and Granger causality analysis," Energy Policy, Elsevier, vol. 110(C), pages 600-608.
    4. Md Arif Hasan & Kh Md Nahiduzzaman & Adel S. Aldosary & Kasun Hewage & Rehan Sadiq, 2022. "Nexus of economic growth, energy consumption, FDI and emissions: a tale of Bangladesh," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6327-6348, May.
    5. Mahamuda Firoj & Nair Sultana & Sharmina Khanom & Md Harun Ur Rashid & Abeda Sultana, 2023. "Pollution haven hypothesis and the environmental Kuznets curve of Bangladesh: an empirical investigation," Asia-Pacific Journal of Regional Science, Springer, vol. 7(1), pages 197-227, March.
    6. Vu, Binh, 2017. "Are population and international trade the main factors for environmental damage in China?," MPRA Paper 79773, University Library of Munich, Germany.
    7. Hasan, Md. Bokhtiar & Ali, Md. Sumon & Uddin, Gazi Salah & Mahi, Masnun Al & Liu, Yang & Park, Donghyun, 2022. "Is Bangladesh on the right path toward sustainable development? An empirical exploration of energy sources, economic growth, and CO2 discharges nexus," Resources Policy, Elsevier, vol. 79(C).
    8. Ahad, Muhammad & Khan, Wali, 2016. "Does Globalization Impede Environmental Quality in Bangladesh? The Role of Real Economic Activities and Energy Use," MPRA Paper 76278, University Library of Munich, Germany, revised Jul 2016.
    9. Xia Chen & Md. Atikur Rahaman & Md. Afzal Hossain & Songsheng Chen, 2023. "Is growth of the financial sector relevant for mitigating CO2 emissions in Bangladesh? The moderation role of the financial sector within the EKC model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9567-9588, September.
    10. Joe Garmondyu Greaves, 2018. "Investigating Saving and Investment Relationship: Evidence from an Autoregressive Distributed Lag Bounds Testing Approach in Liberia," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 89-104.
    11. Pan, Xiongfeng & Uddin, Md. Kamal & Saima, Umme & Guo, Shucen & Guo, Ranran, 2019. "Regime switching effect of financial development on energy intensity: Evidence from Markov-switching vector error correction model," Energy Policy, Elsevier, vol. 135(C).
    12. Mohammad Mahfuzur Rahman & Kanij Jahan Bindu & Md. Kamrul Islam, 2018. "Linking Per Capita GDP to Energy Consumption, Ecological Footprint, and Carbon Dioxide Emission in a Developing Economy in the World: The Case of Bangladesh," Journal of Banking and Financial Dynamics, Sophia, vol. 2(1), pages 9-15.
    13. Adhy Satya Pratama & M. Pudjihardjo & Asfi Manzilati & Devanto Shasta Pratomo, 2021. "Testing the Existence of Environmental Kuznets Curve (EKC) Hypothesis in ASEAN 5," Technium Social Sciences Journal, Technium Science, vol. 22(1), pages 362-375, August.
    14. Khaleda Akter & Md. Adnan Al Nahian & Md. Roni Hossain, 2021. "Exploring the Existence of the N-shaped Environmental Kuznets Curve in Bangladesh: An Autoregressive Distributed Lag Bounds Test Approach," International Journal of Science and Business, IJSAB International, vol. 5(5), pages 150-160.
    15. repec:thr:techub:10022:y:2021:i:1:p:362-375 is not listed on IDEAS

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    More about this item

    Keywords

    EKC; ARDL; VECM; Bangladesh;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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