Scrutinizing the existence of the environmental Kuznets curve in the context of foreign direct investment, trade, and renewable energy in Bangladesh: impending from ARDL method

Md. Hasanur Rahman (), Liton Chandra Voumik (), Md. Maznur Rahman () and Shapan Chandra Majumder ()
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Md. Hasanur Rahman: Sheikh Fazilatunnesa Mujib University
Liton Chandra Voumik: Noakhali Science and Technology University
Md. Maznur Rahman: Noakhali Science and Technology University
Shapan Chandra Majumder: Comilla University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 5, No 64, 12619-12638

Abstract: Abstract In this study, annual time-series data from 1972 to 2021 are utilized to evaluate the existence of the environmental Kuznets curve (EKC) in Bangladesh. The study also takes into consideration a number of other characteristics, including openness to trade, renewable energy sources, and foreign direct investment (FDI). In this work, we have used the ARDL model to analyze the cointegration of the variables using the mixed orders, or I(0) and I(1), of the variables. Zivot–Andrews demonstrate a single structural break across all variables. The ARDL bound test confirms the notion of long-term cointegration between the variables. The relationship between CO2 emissions and economic performance is inverted U-shaped. Because of the presence of the EKC hypothesis, per capita carbon emissions (PCCE) increase until a certain level of GDP per capita is reached, at which point they begin to fall. Although trade has a negative impact on the environment, the uses of renewable energy and foreign direct investment have a positive impact. The speed of adjustment toward equilibrium of this estimation is 48%. The study concludes that the best way to reduce environmental degradation is to employ renewable energy, and environment-friendly business is required to maintain sustainable development in Bangladesh.

Keywords: ARDL model; CO2 emission; EKC; Trade openness; Renewable energy (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03940-4

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