Energy Consumption, Economic Growth & Environmental Quality: A Causal Relationship Revisited for the Bangladesh Economy

Amin, S.B., Porna, A.K., Morshed, A.M., 2016, “Energy Consumption, Economic Growth and Environmental Quality: A Causal Relationship Revisited for the Bangladesh Economy”, International Review of Business Research Papers, Volume 12, No. 2, September 2016, pp. 183-203.

21 Pages Posted: 30 Oct 2018

See all articles by Sakib Amin

Sakib Amin

North South University

Muhib

North South University - Department of Economics

Aroni Kabita Porna

North South University - Department of Economics

Date Written: September 1, 2016

Abstract

Amin et al. (2011) examine the causal relationship among energy use, CO2 emissions and economic growth in Bangladesh and reveal that energy consumption leads to economic growth and no causal relationship exists between economic growth and CO2 emissions in Bangladesh, which implies that economic growth can be achieved without deteriorating the environmental quality. Since there is a debate regarding the fact that whether environmental degradation is measured only by considering CO2 emissions, the objective of the present study is to expand the aforementioned study for robustness check, by considering two more environmental indicators and an extended time period of 1972-2011 and hence, address the question: Can a sustainable economic growth persist without degrading the environment? We consider a multivariate model and perform the Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests to check if the variables are stationary. Next, we apply the Johansen cointegration method followed by the Granger causality test to check for robustness of the relationship among the variables. Our results confirm that Bangladesh cannot achieve economic growth without hindering the environmental quality as there is a unidirectional causality running from CO2 emissions to economic growth. The results also point out that considering only one environmental indicator might lead to a misleading conclusion regarding the economic growth and environmental quality nexus.

Suggested Citation

Amin, Sakib and Morshed, A M Muhib and Porna, Aroni Kabita, Energy Consumption, Economic Growth & Environmental Quality: A Causal Relationship Revisited for the Bangladesh Economy (September 1, 2016). Amin, S.B., Porna, A.K., Morshed, A.M., 2016, “Energy Consumption, Economic Growth and Environmental Quality: A Causal Relationship Revisited for the Bangladesh Economy”, International Review of Business Research Papers, Volume 12, No. 2, September 2016, pp. 183-203., Available at SSRN: https://ssrn.com/abstract=3261622

Sakib Amin (Contact Author)

North South University ( email )

15 Ariful Haque Chowdhury Rd
Bashundhara Residential Area
Bangladesh, Dhaka 1229 1229
Bangladesh

A M Muhib Morshed

North South University - Department of Economics ( email )

NSU Campus, Bashundhara
Bangladesh, Dhaka 1213
India

Aroni Kabita Porna

North South University - Department of Economics ( email )

NSU Campus, Bashundhara
Bangladesh, Dhaka 1213
India

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