The impact of foreign direct investment, tourism, electricity consumption, and economic development on CO2 emissions in Bangladesh

The study's goal is to investigate the impact of foreign direct investment (FDI), tourism, electricity consumption, and economic development on CO2 emissions in Bangladesh between 1990 and 2019. Empirical results reveal that FDI, electricity consumption, and economic development variables have significant and positive long-term effects on CO2 emissions. Tourism, on the other hand, has a long-term negative effect. The square of the GDP variable has a substantial negative coefficient. This indicates that in Bangladesh, the nexus between CO2 emissions and economic development is U-shaped inverted. As a result, the EKC postulate is proven to be correct. In the short term, electricity consumption, economic development, GDP(2), and tourism have no substantial effect on CO2 emissions. Only the coefficients of FDI are negative and significant. The expected ECM coefficients are also negative and statistically significant. According to these data, the system as a whole adjusts at a rate of 60%. The Granger causality study reveals one direction of causation between electricity consumption and CO2 emissions, CO2 emissions and economic development, electricity consumption and economic development, FDI, and CO2 emissions.

Automated summary

This study investigates the impact of FDI, tourism, electricity consumption, and economic development on CO2 emissions in Bangladesh. The results show that FDI, electricity consumption, and economic development have significant positive long-term effects on CO2 emissions, while tourism has a long-term negative effect. Additionally, the study confirms the validity of the Environmental Kuznets Curve.