Economic Growth, Income Inequality, Globalization, and Carbon Dioxide Emissions: A Case Study of Bangladesh

Abstract

As Bangladesh is an extremely climate-vulnerable country, this study takes a close look into the link between economic factors and environmental outcomes in Bangladesh. Using annual data from 1990 to 2015, it investigates the impacts of economic growth, income inequality, and globalization on carbon dioxide emissions. The long-run and short-run effects are estimated through cointegration analysis and an error correction model. While there is no statistically significant relationship between economic growth and carbon dioxide emissions in the short run, economic growth increases carbon dioxide emissions in the long run. On the other hand, a rise in income inequality leads to a rise in carbon dioxide emissions in the short run and in the long run. This study finds no statistically significant relationship between globalization and carbon dioxide emissions in the short run or in the long run. It concludes by setting out some important policy implications.