Nexus between economic growth, energy use, urbanization, agricultural productivity, and carbon dioxide emissions: New insights from Bangladesh

Greenhouse gases (GHGs) emissions, notably carbon dioxide (CO₂) emissions are causing global climate change, which poses enormous hazards to human life, the environment, development, and sustainability. Bangladesh is predominantly an agricultural country experiencing continuous economic growth and rapid urbanization which is causing higher energy consumption and CO₂ emissions. The present study empirically explores the nexus between economic growth, energy use, urbanization, agricultural productivity, and CO₂ emissions in Bangladesh. Time series data from 1972 to 2018 were utilized by employing the Dynamic Ordinary Least Squares (DOLS) approach. The Autoregressive Distributed Lag (ARDL) bounds test revealed evidence of cointegration among the variables in the long run which has been verified by the Johansen cointegration test and Engle-Granger cointegration test. The empirical findings reveal that economic growth, energy use, urbanization, and reduced agricultural productivity increase CO₂ emissions in Bangladesh. The estimated results are robust to alternative estimators such as fully modified least squares (FMOLS), and canonical cointegrating regression (CCR). In addition, the pairwise Granger causality test is utilized to capture the causal linkage between the variables. This study adds to the current body of knowledge by shining light on the factors that contribute to environmental degradation in Bangladesh. This article put forward policy recommendations aimed at sustainable development by establishing strong regulatory policy instruments to reduce environmental degradation.