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, GDP², 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.