Exploring the depth of energy penetration in economic advancement: Perspective of Bangladesh
Developing countries consume a tiny share of world commercial energy. This tempts policymakers in developing countries to sort out ways to increase commercial energy demand so that their invaluable resources are best utilized. Country like Bangladesh may fall in trap if quickly declining and immensely valuable energy is wasted in unsustainable growth. This urges for better use of its scarce resources for sustainable growth. In this paper, we aim to identify how energy consumption in Bangladesh is related to various growth indicators like national income, financial development, industrialization and urbanization in the long-run in search of a right path for sustainable development. In this study we try to assess the relationship among energy consumption, financial development, economic growth, industrialization and urbanization from 1980 to 2010. A number of cointegration techniques are employed to examine whether there is a long-run relationship. Besides these, we also employed augmented Granger causality test to examine the causality if presents. This study finds that financial development, economic growth, industrialization and urbanization have positive impact on energy consumption in short-run but industrialization has no impact in the long run. Our causality test ensures that the above mentioned variables Granger cause energy consumption. For sustainable growth, industrialization should be given priority as future consumption of energy in industrial sector will be greater than any other sector. This future demand can only be fulfilled by injecting more and more renewable energy through solar, wind and other technology as nonrenewable energy are declining quickly.
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Volume (Year): 49 (2015)
Issue (Month): C ()
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