Carbonomics of the Bangladesh agricultural output: causality and long‐run equilibrium

Abstract

Purpose

The key purpose of this paper is to examine the causality and long‐run relationship between CO2 emission and agricultural output for an agriculture‐dependent developing country, namely Bangladesh.

Design/methodology/approach

In order to attain the objective, this study has used long‐time series data and employed advanced econometric techniques of unit root test, nonlinear least square estimation, Vector Error Correction estimation and Granger causality test.

Findings

The empirical results of the study reveal that Bangladesh agricultural output is not a Granger causal for Bangladesh CO2 emission, but the country's CO2 emission is a Granger causal for its agricultural output. The results also reveal for Bangladesh that any disequilibrium between CO2 emissions and agricultural output could take approximately 17 years to converge to the long‐run equilibrium. The results further reveal that the adjustment rate for Bangladesh agricultural output is positive and quite fast at the rate of 69 percent a year. So any disequilibrium will be corrected mostly by the adjustment in Bangladesh agricultural output.

Practical implications

The current CO2 emission in Bangladesh is still below the equilibrium level, which is considered to be an advantage for the country, particularly its agriculture sector which will reasonably not face any stricter CO2 emissions controlling policies and regulations in the near future.

Originality/value

The originality of this study lies on the extent to which an agriculture‐dependent developing country such as Bangladesh does not have greater concern about the CO2 emission for now and the near future. The originality does also lie on the fact that no other study has yet examined this issue.

Citation

Murad, W. and Ratnatunga, J. (2013), "Carbonomics of the Bangladesh agricultural output: causality and long‐run equilibrium", Management of Environmental Quality, Vol. 24 No. 2, pp. 256-271. https://doi.org/10.1108/14777831311303128