An analysis of energy, environment and economic growth (EEE) nexus: a 2SLS approach

The growing apprehension of global warming, greenhouse gas emissions and increasing use of fossil fuel due to emergent economic activity signifies that for the sustainability of the environment cleaner energy use is important. In the same pursuit, this study aims to examine the energy, environment and economic growth nexus of Bangladesh, incorporating both renewable and non-renewable energy consumption with forest depletion. We have employed the Two-Stage Least Square approach to avoid likely simultaneity bias and possible endogeneity of the variables arising from the ordinary least squares. Result postulates non-renewable energy consumption and forest depletion have a significant impact on CO2 emission, whereas renewable energy shows no significant consequence. The issue which arises in this regard is that renewable energy consumption has not yet reached a stage from where it could play a substantial role in emission reduction of the country. Therefore, countries should adopt policies that would provide a conducive environment for affordable energy use.