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Macroeconomic Factors Determining CO2 Emission in Bangladesh: Through the Lens of VECM Approach

Never before has this planet encountered this kind of environmental crisis. Overall macroeconomic activities are inarguably linked to the worsening environmental quality. As a result, designing economic policies inevitably requires the knowledge of the factors that hurt the environment and lead to serious climatic conditions. Using secondary data from the year 1990 to 2021 and employing vector error correction model (VECM), this study attempts to determine the factors impacting carbon dioxide (CO2) emission in Bangladesh. The findings of this study show that GDP, total trade volume (TT) and energy consumption (EN) raise the level of CO2 emission in the short run and the effect of population (PO) is not statistically significant. The long-run model also substantiates that GDP, TT, EN and PO have positive impact on the CO2 emission. Though the use of renewable energy (RE) reduces emissions both in the short and long run, this effect is not statistically significant. These findings can help recognize the unintended losses incurred and formulate effectual policies for withstanding the pernicious effects of CO2 emission from a developing country perspective. Thus, this study significantly contributes to the appropriate policymaking activities that help developing nations around the world to sustainably achieve economic growth without hurting the environment.

CO2 Emission, GDP, Energy Use, Trade Volume, Population, Environmental Quality, VECM, Bangladesh

Md. Tanvir Ahmed, Refat Ferdous. (2023). Macroeconomic Factors Determining CO2 Emission in Bangladesh: Through the Lens of VECM Approach. International Journal of Economy, Energy and Environment, 8(5), 118-128.

Copyright © 2023 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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