Economic Growth, CO2 Emissions and Energy Consumption: The Case of Bangladesh

Abstract

In recent years due to factors, such as increases in greenhouse and carbon dioxide (CO2) emissions, global warming and climate changes has become a major threat for all countries. So in order to prevent this increased environmental pollution and degradation CO 2 emissions must be reduced. This study examines economic growth, CO 2 emissions and energy consumption relationship in Turkey by using cointegration test. For this purpose 1960-2010 periods taken and annual data of Gross Domestic Product (Y), Carbon Dioxide Emissions (CO) and Energy Consumption (EC) are used. The obtained empirical results from this paper indicated that CO 2 emissions effect negatively economic growth while energy consumption effect positively it. 1. Introduction The ultimate goal of an economy is to achieve the desired level of economic growth and development and to maintain at this level. Countries meet with a number of difficulties during economic growth and development. One of the most important of these is the damage on environment and environmental pollution. A large portion of the world's energy need is met through fossil fuels the reserve of which is rapidly running out. The gas emissions from these sources increase the amount of carbon dioxide which harms the green space as well as inflicting irreparable damages on the atmosphere. It in turn leads to extremely risky climate changes such as drought, floods, tornadoes, rising sea levels, and melting of glaciers. Global warming and climate change have been one of the most crucial environmental problems in recent years for both developed and developing countries. Increase in global trade and travel, and a rapid surge in economic activities all around the world have caused a significant increase in carbon dioxide (CO 2) emission. Heavy use of energy and other natural resources and waste cause environmental deterioration. There have been debates for quite some time on the relationship between economic growth and development and environmental quality. Experts have been trying to explain this relationship between economic growth and environmental pollution with the Environmental Kuznets Curve (EKC) in recent years. According to EKC hypothesis, the income growth from industrialization will cause both income inequality and environmental damage in the initial stage of the economic development process but this trend will be reversed in further phases when a certain income level is achieved. This paper attempts to investigate empirically the long-run effect of carbon emissions and energy use on economic growth in Turkey over the period 1960-2010. The structure of this paper is organized as follows: In section II presents theoretical framework, literature and empirical studies. Section III presents the data and methodology used. Empirical results are discussed in Section IV. The final section draws some concluding remarks and suggestions.