Carbon Emissions and Environment: Evidences from Three Selected SAARC Countries

Data on carbon emissions, industrial output growth, population growth and FDI inflows are used for Bangladesh, Nepal and Maldives over 1972 – 2008. Time series data on all variables are nonstationary in terms of both ADF and KPSS tests with different orders of integration. As a result, ARDL model and VECM are estimated. There are evidences of cointegrating relationship among the variables, long-run causal flows from industrial output growth, population growth and FDI to carbon emissions in Bangladesh and Nepal. However, similar inferences are weak for Maldives as the associated t-value of the error-correction term ( ) is not statistically significant. Short-run net positive interactive feedback effects among the variables are also evidenced.