International Journal of Business and Economics Research 2014; 3(6): 220-227 Published online December 16, 2014 (http://www.sciencepublishinggroup.com/j/ijber) doi: 10.11648/j.ijber.20140306.13 ISSN: 2328-7543 (Print); ISSN: 2328-756X (Online) Economic growth, CO 2 emissions and energy consumption: The case of Bangladesh Bikash Chandra Ghosh 1 , Khandakar Jahangir Alam 2 , Md. Ataul Gani Osmani 3 1 Department of Economics, Pabna University of Science & Technology, Pabna-6600, Bangladesh 2 Department of Economics, Begum Rokeya University, Rangpur, Bangladesh 3 Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh Email address: bikasheco_pust@yamil.com (B. C. Ghosh), nirob_eco_ru@yahoo.com (K. J. Alam), ataul.economics@yahoo.com (M. A. G. Osmani) To cite this article: Bikash Chandra Ghosh, Khandakar Jahangir Alam, Md. Ataul Gani Osmani. Economic Growth, CO 2 Emissions and Energy Consumption: The Case of Bangladesh. International Journal of Business and Economics Research. Vol. 3, No. 6, 2014, pp. 220-227. doi: 10.11648/j.ijber.20140306.13 Abstract: Issues on climate change have been recognized as serious challenges for regional sustainable development both at a global and local level. Given the background that most of the artificial carbon emissions are resulted from the energy consumption sector and the energy is also the key element resource for economic development, this study examines economic growth, CO 2 emissions and energy consumption relationship in Bangladesh by using cointegration test. For this purpose 1972- 2011 periods taken and annual data of Gross Domestic Product (Y), Carbon Dioxide Emissions (CO) and Energy Consumption (EC) are used. The obtain results from this paper indicated that energy consumption has a positive and significant impact on economic growth while carbon emission has a negative and insignificant effect, ensuring that economic growth in Bangladesh can be achieved without degrading the quality of the environment. Keywords: Economic Growth, CO 2 Emissions, Energy Consumption, Bangladesh, Cointegration Test 1. Introduction Over the past century, every economy has seen economic growth as one of the principle objectives to be achieved in the macroeconomic stabilization policy area. Kuznets (1973) defined economic growth as a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments that it demands. Also, economic growth as the steady process by which the productive capacity of the economy is increased over time to bring about rising levels of national output and income (Todaro and Smith, 2011). Moreover, it has been the only medium anticipated against poverty eradication, more often than not facing the developing countries. For instance, an economy agitating to achieve a desired growth rate over a particular period, such economy must have the basic resources like energy and other natural resources. In order to make economic development sustainable, resources such as energy supply must be available and utilized in such a way that there is enough for the present generation as well as the upcoming generation. Energy consumption is the total amount of energy which is spent by industries (plants and machineries, office equipments) and households (appliances) in an economy. The amount of energy used per industry depends on machineries, climate etc. While household depends on the standard of living, climate, age, type of residence etc (Masuduzzaman, 2012) and this energy consumption is driven by such important factors as industrialization, extensive urbanization, population growth, rising standard of living and even the modernization of the agricultural sector. Today, energy has been the heart of most critical economic, environmental and developmental issues in the global world which has also contributed significantly to climate degradation through carbon emission- a gas in the atmosphere causing radiation within the environment. Higher economic growth requires a higher level of energy consumption and is responsible for higher levels of CO 2 emissions. This notion attracted the world’s attention in the 1990s because of the potential threats to the ecosystem. It became the general consensus that higher economic growth should not be pursued at the expense of the environment and this issue raised the question of how economic growth can be