Does renewable energy consumption lead to sustainable economic growth? Evidence from Bangladesh
摘要
This study assesses the effect of the consumption of renewable energy on the sustainable economic growth of Bangladesh by applying the Autoregressive Distributed Lag bounds testing method to a time series dataset that spans 1990–2023. The interaction between renewable energy usage, real GDP, labor force, exports, imports, gross capital formation, and per capita CO2 emissions are examined in this research. The study finds evidence of a cointegration relation, indicating the long-term renewable energy consumption is positively related to GDP by 0.01%. The elasticities for renewable energy are very low due to its small percentage of total energy production at only 3.5% and its continued dependence on fossil fuel sources. Additionally, the labor force contributes to GDP growth in the long term by 0.44%, while gross capital formation does so by 0.31%, imports do so by 0.13%. In contrast to these positive contributions, there are some negative contributions to GDP growth including a slight contribution from exports (−0.04%), and a strong positive contribution from per capita CO2 emissions (0.54%). The error correction term shows that approximately 65% of any short-term imbalances adjust back towards the long run equilibrium annually. These results indicate the need for increased renewable energy investment, increased energy efficiency, export diversification and an adoption of green technologies to help facilitate sustainable economic growth in Bangladesh.