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Urbanization and CO 2 emission in Bangladesh:

The Application of STIRPAT model

Conference Paper December 2016

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Urbanization and CO2 emission in
Bangladesh: The Application of STIRPAT
model.

Mohammad Hassan
Department of Economics & Banking.
International Islamic University Chittagong.

Abstract:

The ecological modernization theory and the urban environmental transition theory posit that in a
developing country, urbanization is detrimental to environment. The compact city theory, on the
other hand, emphasizes that urbanization improves the environmental quality. This study
investigates the impact of urbanization on CO2 emission in the context of Bangladesh over the
period of 1972-2013 employing ARDL co-integration approach based on STIRTAP model
(Stochastic Impacts by Regression on Population, Affluence and Technology model). The results
indicate that urbanization has a positive and significant effect on CO2 emission. The energy-use,
compared to other factors, is found to be the most causing factor for CO2 emission rise.
Renewable energy use, energy conservation policies, and energy-efficient vehicle regulations in
urban areas have been recommended in this study for urban CO2 reduction.
Keywords: Bangladesh, CO2, Energy use, Renewable energy, STIRPAT, Urbanization.

A preliminary version of this paper was presented in

Insearch 2016: 3rd International Integrative Research Conference on Development, Governance
and Transformation
Date: 27 & 28 December 2016
Venue: BARD, Comilla, Bangladesh
1. Introduction.

The global scale Carbon dioxide (CO) has witnessed a significant upward trend. More precisely,

the amount of global carbon emissions have risen by 99% since 1971 and are projected to rise

45% by 2030 (UN). CO and other greenhouse gases are said to be the responsible for hotter

temperature throughout the world and for many extreme weather conditions like floods, heat

wave and cyclones in recent years (Anderson 2013). CO is considered to be the most

threatening gas for a safe atmosphere among other gases, for its largest share of total Greenhouse

gas. The calculated CO emissions comprise 76% of total GHG emissions (IPPCC report 2014).

For its significant share of GHG, CO has been one of the hottest topics over the decades and the

world is seeking to appropriate measures to combat the CO emission rise.

This is commonly believed that CO and other Greenhouse gases are equally distributed across

the globe, therefore, local CO emission does not have any especial effect on the local climate,

rather, and thus it is believed that CO emissions from one region have the uniform effects on

that region and other regions. But this belief was challenged by Jacobson (2010). Through data-

evaluated numerical modeling with telescoping domains, he showed strong evidences on that,

local CO emission can raise the local ozone and particulate matter and that, CO rise can raise

the local premature mortality.

Many factors are said to be the main sources of CO emissions. The two major sources of CO

are the (i) fossil-fuel burning and the (ii) cement production. Both sources, according to IPPCC

report, are responsible for about 75% of total man-made CO emissions. Another significant

source is deforestation which is responsible for the rest 25%. Urban areas are considered to be

the fundamental hub of these sources (Velasco and Roth 2010).

Urban areas contribute to the CO emission boom in many ways. First, the dense population of

cities requires heavy energy consumption and large scale constructions to provide additional

floors for residents. The heavy energy consumption by city dwellers causes the more fossil fuel

burn and therefore causes large-scale CO emission. Again, the growing numbers of residential

buildings require more cement production, and thus, causes to the CO emission boom. Second,

most of cities are sprawling citiescities with large territory the transport network layout is

complex with a heavy traffic flow. Because urban Transport system largely depends on engine

based transport system that relies on fossil fuel, the traffic system with more vehicles in cities

causes more CO emission than what rural transport system does. Third, urban areas are,

generally, the hub of investments and manufacturing industries making them the polluting

centers within a country. See Newman (2006), Hoornweg, Sugar, and Gomez (2011), Ohshita,

Zhou, and Price (2015) for more details.

However, Some urban specialist, for example Hoornweg, Sugar, and Gomez (2011) Dodman

(2009), Newman (2006), denies the idea that urban areas are responsible for the majority of

greenhouse gas emission. In fact, many researchers hold that urbanization can be good for

environment. They defend this notion with several arguments. First, high density leads to

economies of scale and the low density leads to diseconomies of scale. Enjoying the economies

of scale means that one can produce or consume more goods with relatively low inputs. To be
straight, many people can get utilities from little amount of energy. For example, many people

from 1 bulb or 1 bus. The Second argument is that, the distance of bus travel reduces as people

shift to urban areas from rural areas for permanent staying, causing lesser fossil fuel burn for

long distance. The third argument from this group is that, high literacy rate accompanied with

higher income in cities compared to rural areas possibly can raise the demands of eco-friendly

products and the use of advanced and less polluting technologies.

Therefore, the conclusion on whether urbanization causes CO emission or does not seems not

established. Looking at arguments of conflicting opinions of both parties, it is difficult to

determine the effect of urbanization on CO emission and other indicators of environmental

damage in any particular country, or in any stage of its economic development. An empirical

investigation using the data of CO and urbanization, perhaps, can assist one draws a conclusion

regarding the relationship between CO emission and urbanization. As Bangladesh is still in the

first stage of economic development, it is highly likely that urbanization lead more CO

emission, like other countries at this stage (Sadorsky 2014). Empirical evidence is, however,

seems necessary to examine if this hypothesisurbanization causes CO emission is true.

This empirical study is an effort to examine this hypothesis in Bangladesh with World Bank data.

The rest of the paper is organized as follows: section 2 sheds light on urbanization and CO

emission trends in Bangladesh. Section 2 presents a brief overview on previous studies. Section 4

addresses the objectives of this study and the formulation of hypothesis. Section 5 discusses the

STIRPAT model and estimation methodology. Section 6 defines the variables and mentions data

source. Section 7 presents the results. And finally, section 8 draws conclusion and recommends

some relevant policies for the abatement of carbon emission.

2. Urbanization and CO emission trends in Bangladesh:

The urban population relative to the total population in Bangladesh, like many other emerging

countries, has experienced a sharp upward trend since the independence of Bangladesh, making

it 34.28 percent of total population in 2014 from 8.22 percent in 1972 (WDI). Whereas, 55.1

percent of total urban population living in slum. More than 17 billion live in largest cities which

make 31 percent of total urban population. The annual urban population growth is always higher

than the rural population growth. Urban population share was 8.22% only in 1972 then grew

faster 34.28% in 2014. Percentage of urban population is displayed in figure 1.

Figure1. Urban population to total population (in percentage). Source: WDI

35

30

25
Percentage

20

15

10

0
1982

2002
1972
1974
1976
1978
1980

1984
1986
1988
1990
1992
1994
1996
1998
2000

2004
2006
2008
2010
2012

Year

Table1.Total CO emissions kt (kiloton) in SAARC countries. Source: WDI

Afghanistan Bhutan Maldives Pakistan Bangladesh Nepal India Sri Lanka

2009 6776.616 388.702 883.747 158836.1 53824.23 4334.394 1738646 13175.53
 2010 8470.77 487.711 898.415 161395.7 59992.12 5056.793 1719691 13688.91
2011 12251.45 733.4 953.42 162008.1 63571.11 5533.503 1846764 15232.72
2012 20454.53 817.741 1078.098 163060.5 67480.13 5845.198 2018504 16226.48
2013 21268.6 883.747 1048.762 153368.6 68950.6 6501.591 2034752 16024.79
Average 13844.4 662.3 972.5 159733.8 62763.6 5454.3 1871671.4 14869.7

Table 1 displays the total Carbon emissions of Bangladesh along with those of other 7 South

Asian countries for five years (2009-2013). It is clear from table 1 that India and Pakistan are the

two most polluting countries in South Asia that emit more than 1 lakh on averageabout

1871671.4 in India and 159733.8 in Pakistan. Compared to them, other countries emit somewhat

less carbons. Bangladesh, however, appeared to be the third CO emitter.

CO emission in Bangladesh from gaseous fuel consumption was 43413.6 kt in 2013, and from

liquid fuel consumption was 14304.9 kt. The electricity and heat production has been the largest

source of CO in Bangladesh. In 2013, the total CO emission from this source was about 52%

of total fossil fuel lead emission. Other sources such as (i) residential buildings and commercial

and public services 11% (ii) manufacturing industries and construction 18% (iii) other sectors,

excluding residential buildings and commercial and public services 5% and (iv) transports 14%

of all fossil fuel driven CO. The respective share of each source for CO emission was depicted

in figure 2.

Figure 2.CO emission from different sectors in Bangladesh.

 60

50 Residential buildings %

40 Electricity and heat

production%
30 Industries and
construction%
20
Other sectors%

10
Transport%

0
1992
1971
1974
1977
1980
1983
1986
1989

1995
1998
2001
2004
2007
2010
2013

3. Literature review:

Urbanization and CO emission relationship has long been the interest of empirical

investigation. This interest is, perhaps, stemmed from three major theoriesthe ecological

modernization theory, the urban environmental transition theory and the compact city theory.

Both the ecological modernization theory the urban environmental transition theory agree that

modernization in social and economic factors can causes the environmental degradation,

especially, in the first stages of economic development. The compact city theory, conversely,

emphasizes that urbanization is rather beneficial for environment. See Poumanyvong and

Kaneko (2010) for further details.

To summarize, empirical studies on urbanization and CO relationship can be categorized in two

research strands. The first strand of studies examined the relationship with STIRPAT model. The

second strand, on the other hand, explored this relationship by including the urbanization in
Environmental Kuznets Curve (EKC) model. I cited some notable works of these two research

strands in the following paragraphs.

Martnez-Zarzoso and Maruotti (2011) estimated STIRPAT model for panel data of 95 countries

1975 to 2003. The authors considered heterogeneity within countries and classified into three

groups: Low-income economies, Lower-middle-income and Upper-middle-income. They found

the effect of urbanization on CO emission in case of low-income countries is higher than that of

other two types of economies. The effects of urbanization on CO emission in upper and highly

developed countries, on the other hand, are negative. They concluded that after a certain level of

urbanization the effect of urbanization on CO emission become negative, implying that

urbanization can be good for CO emission after that point.

Shahbaz et al. (2016) estimated the STIRPAT model using quarterly data 1970Q12011Q4 of

Malaysia, applying BayerHanck combined with co-integration approach: ARDL bound testing

approach and VECM Granger causality test. The empirical results reveal that economic growth is

the main responsible for CO emission. They found that urbanization and CO emission follow

U-shaped curve. This means that at the initial stage, urbanization and CO emission have a

negative relation, but after a certain bottom point this relation turns to positive.

Poumanyvong and Kaneko (2010) explored the relationship between urbanization and total

energy use and between urbanization and CO emission, for 99 countries over the period

spanning from 1975-2005 utilizing STIRPAT model. The countries were classified into three

different groups: low income countries, middle income countries and high income countries. The

empirical results reveal that the urbanization-emission is positive but different across the groups.
In middle income countries the positive relation is strong, whereas, in low and high income

countries, the positive relationship was weak.

Sadorsky (2014) explored the relationship between urbanization and CO emission of 16

developing countries for the period spanning from 1971-2009. The 16 emerging countries are

Brazil, Chile, China, Colombia, Egypt, Hungary, India, Indonesia, Korea (South), Malaysia,

Mexico,Morocco, Philippines, South Africa, Thailand, and Turkey. The study used STIRPAT

model in panel co-integration framework. The empirical results reveal that the effect of

urbanization on CO emission is insignificant, whereas, the effects of energy intensity and GDP

per capita on CO emission are significant.

Fan et al. (2006) applied STIRPAT model in both Ordinary Least Square (OLS) and Partial Least

Squares (PLS) regressions framework to examine the effects of various factors including

urbanization on CO emission. This research used the data of 55 high-income countries, 40

upper-middle income countries, 54 lower middle income countries and 59 low-income

economies for the period 1975-2000. The results show that the impact of GDP per capita is very

high in low-income countries, impact of energy intensity is high in middle-income countries. The

results of OLS regression showed that the effects of urbanization on high-income countries are

negative and significant. Negative effects also found in case of upper-middle income and lower-

middle income countries but they are not significant. However, in case of low-income countries

the effect was found to be positive and significant. The PLS regression results, on the other hand,

revealed that the impacts of urbanization on CO emission were positive.

Sharma (2011) explored the determinants of CO for 69 countries for the years spanning from

1985 to 2005. The author found that GDP per capita and urbanization were the main contributors
to the CO emission. But the variables such as trade openness, per capita total primary energy

consumption and per capita electric power consumption were insignificant contributors. Sharif

Hossain (2011) examined the short-run and long-run causal relationship between carbon

emission and different variables including urbanization for 9 newly industrialized countries

(Brazil, China, India, Malaysia, Mexico, Philippines, South Africa, Thailand, and Turkey) for the

period of 1971-2007. The study did not find a conclusive result for the urbanization-CO

relationship. The study applied three different model specifications, and found negative but

insignificant impacts of urbanization on carbon emission in two specifications but positive and

significant impacts in one specification.

Many studies included the urbanization variable in Environmental Kuznets Curve (EKC) model.

Li, Wang, and Zhao (2016), for example, estimated the EKC where CO emission was

dependent variable with other pollution indicators and GDP per capita, trade openness, energy

and urbanization as independent variables, using the panel data of 28 provinces of China during

the period 1996-2012. The results from Generalized Method of Moments (GMM) estimator used

in this study revealed that urbanization had positive and statistically significant effects on CO

emission and other pollution indicators as well. Al-Mulali, Solarin, and Ozturk (2016) examined

the EKC model for Kenya using the time series data of 1980-2012 incorporating the urbanization

in the model. They found that urbanization has a long-run and short-run impact on Carbon

emission.
The research by Azam and Khan (2015) is, perhaps, the most significant and relevant research to

the application of STIRPAT model in Bangladesh. The study empirically explored relationship

between urbanization and CO emission for 4 South Asian countries: Bangladesh, India,

Pakistan, and Sri Lanka for the period spanning from 1982 to 2013. The results revealed that

urban population had negative impact on CO emission, implying that the increase in urban

population causes less CO emission and thus leads to environmental improvement. This result

seems contrary to the majority of researches done in developing countries that shows rather a

positive relation: urbanization causes Carbon emission. Instead of using proportion of urban

population to total population, Azam and Khan (2015) used total urban population as the

indicator of urbanization. Besides, a new explanatory variable percentage of total arable land

was included in the model.

A further inquiry on urbanization-CO relation in case of Bangladesh with more recent data of

Bangladesh and with more rigorous and newly developed time series econometrics seems

necessary. The purpose of this paper is, therefore, to perform a further investigation of

urbanization-CO relationship in Bangladesh utilizing the STIRPAT model with more sample

years and with more applicable methodology.

4. Objectives of this study and formulation of hypothesis:

The central objective of this paper is to test the impact of urbanization on CO emission. But this

study also investigates the impacts of other factors that are believed to be causing CO emission
such as population, income, energy intensity within the same framework. The list of hypothesis

to be tested is as follows:

H1: Urbanization causes CO emission.

H2: Population causes CO emission

H3: Energy intensity causes CO emission

H4: Income causes CO emission.

5. Methodology:

Most of the studies dealing with carbon emission-urbanization, as mentioned in literature review

section, used (Stochastic Impacts by Regression on Population, Affluence and Technology)

STIRPAT model proposed by Dietz and Rosa (1997) and York, Rosa, and Dietz (2003).

STIRPAT model is, basically, an extended version of Influence, Population, Affluence, and

Technology (IPAT) model developed by Ehrlich and Holdren (1971). The IPAT model takes the

following form:

I=PxAxT (1)

Where, x denotes multiply sign. I=Impacts on environment A=Affluence, and T=Technology.

Dietz and Rosa (1997) refined this IPAT identity to allow hypothesis testing. The refined model

takes the following form.

It= Pt 1 At 2 Tt 3 t (2)

Majority of the studies transformed the model to natural logarithmic form. After transformation

to natural logarithm we get,

lnIt=+ 1(lnPt)+ 2(lnAt)+ 3(lnTt)+ln t (3)

If we include urbanization denoted by Ut , let Ct denotes CO emission, and replace It by Ct the

final model to be estimated in this study becomes,

Ct=+ 1(lnPt)+ 2(lnAt)+ 3(lnTt)+ 4(lnUt)+ +ln t (4)

Where, represents intercept term and t denotes error term

6. Defining variables and data source:

This study followed the model specification (logarithmic) and selection of variables of Sadorsky

(2014), hence, the variables of the equation 4 are defined as follows:

lnCt: natural logarithm of total CO emissions (metric tons of carbon dioxide emissions)

lnPt: the natural log of total population

lnAt: natural logarithm of affluence ( proxied by real GDP per capita at constant 2010 USD)
lnTt: energy intensity is used to describe technology. Energy intensity is the natural log of total

energy use per dollar of GDP (energy use in kg of oil equivalent relative to GDP, constant 2010

USD

lnUt: the natural log of urbanization (calculated by the proportion of the total population living

in urban areas)

It is worth noting here that the time series estimation yields non reliable and spurious results,

hence it is important to check co-integration among the variables. If two series are co-integrated

the OLS estimation can provide reliable results given that all the series are co-integrated of order

1. See Asteriou and Hall (2007), Enders (2004) and Gujarati (2004) for more details on co-

integration. To get long-run co-integrating equation the equation 4 can be modified into either

VECM (Vector Error Correction Model) ARDL or (Autoregressive Distributed Lag Model). This

study modified to the ARDL because co-integration based on ARDL model is more appropriate

in small sample (less than 100) (Pesaran, Shin, and Smith 2001). Appendix B presents the

modified ARDL model of equation 4.

Data source:

The annual data for all the variables have been collected from World Development Indicators

(WDI) compiled by World Bank. Data range is 1972-2013. The data of 2014 and 2015 for

carbon emission and energy consumption are not available. Appendix A contains the descriptive

statistics of all series.

7. Findings and discussion:

(7.1) Unit root test and co-integration test results:

The bound testing approach of co-integration requires that none of the variables in the model is

integrated of order two. That is, none of the variables is I(2). Table 2 shows the results of two

widely used Stationarity test to examine if the variables used in the model pass this requirement.

The results show that all of the variables are either integrated of order zero or integrated of order

1. Thus, i can proceed to co-integration test under ARDL bound test. Table 3 shows that F-

statistics is greater than the critical upper value, thus the independent variablesAffluence,

technology, population, and urbanizationhave a long run relationship with carbon emission.

Note that, maximum lag of 2 was chosen because data of this study is yearly in frequency, and

for optimal lag length SchawrtzBayesian criteria (SBC) was chosen as suggested by Pesaran,

Shin, and Smith (2001), and Narayan and Narayan (2010).

Table2.Unit root test results.

Augmented Dickey-Fuller (ADF) Phillips Perron (PP) test

test
 t-value t-value Adj. t-value Adj. t-value Decision about
(Level ) (1st (Level) (1st difference) order of
difference) integration
lnCt -0.49 -6.11*** -5.82*** -22.91 I(1)
lnAt 0.59 -9.38*** 1.79 -9.55*** I(1)
lnTt -2.67 -9.56*** -2.46 -27.75*** I(1)
lnPt -0.35 -2.29 1.94 -5.11*** I(1)
lnUt -7.22*** -1.66 -3.02 -2.14 I(0)
Note: Null hypothesis of ADF and PP is :series has a unit root/series is stationary. *** and ** represent that null is rejected at 1% and 5% significance level, respectively.
Coefficients without any star sign indicates that null could not be rejected. maximum lag was selected 10 following the rule of thumb suggested by Schwert (1989), and optimal
lag following SIC criteria. ADF and PP equation specification was determined by procedures suggested by (Dolado, Jenkinson, and Sosvilla-Rivero 1990)

Table3. Co-integration test results.

F Statistics Critical value

at 5%
lower upper
4.007*** 2.26 3.48
Note: *** represent the rejection of null hypothesis of no co-integration at 1% significance level. K denotes number of independent variables. Critical values are from
(Pesaran, Shin, and Smith 2001) Case I: No intercept and no trend.

(7.2) STIRPAT model results and diagnostic tests.

Table 4.Results for STIRPAT model and Diagnostic tests:

Regressor Coefficients

lnAt 1.05***
lnTt 2.76***
lnPt 0.21***
lnUt 1.24***
R2 0.99
Adjusted R2 0.99

Diagnostic tests P-values

Prob(F-statistics) 0.00 (passed)
Durbin Watson 1.81 (passed)
Stats
Serial correlation 0.59 (passed)
LM: p. X2(1)
Serial correlation 0.45 (passed)
LM : p. X2(2)
Serial correlation 0.38 (passed)
LM: p. X2(3)
Breusch-Pagan- 0.68 (passed)
Godfrey: p. X (6)
2

ARCH : p.X
2
(1) 0.62 (passed)
ARCH : P. X
2
(2) 0.78 (passed)
ARCH : P. X
2
(3) 0.74 (passed)
Normality JB P. X
2
(2) 0.04 (Not Passed)
2
Notes: *** represents that coefficient is significant 1% significance level. Numbers in () are the lag-length and order of test. P and X denotes p-value and Chi-square,
respectively. LM, stands for Lagrange multiplier test, examines the serial correlation with null of no serial correlation. JB (JarqueBera test) examines the normality
of residual with null of being residuals are not normally distributed. ARCH (Autoregressive Conditional Heteroskedasticity) and Breusch-Pagan-Godfrey check for
Heteroskedasticity with null of presence of Heteroskedasticity.

Table 4 displays the estimated results of STIRPAT model along with various diagnostic tests that

have been used to examine the robustness of the estimated results. It is apparent from table 4 that

all of the variables have significant positive impacts on carbon emission. We can interpret the

results, since the estimated model is logarithmic, in elasticity form as follows: (i) 1 percent

increase in affluence (GDP per capita) causes the CO emission to increase 1.05 percent, (ii) 1
percent increase in technology (energy intensity) leads to an increase of CO emission by 2.76%

(iii) 1 percent rise in population causes 0.21% rise in CO emission and (iv) 1 percent increment

of urbanization drives 1.24% in CO emission. It is worth to mention here that, since all of the

independent variablesAffluence, technology, population, and urbanizationhave a long run

relationship with carbon emission (as apparent in table 3.), it is valid to conclude that the

coefficients (impacts) estimated in table 4 is reliable and not spurious. Besides, the estimated

model has successfully passed all of the diagnostic tests (except normality test), making the

results robust. The normality test shows that the residuals are not normally distributed, the results

are still robust. The reason is that the size of observations of this study is small (42 years). The

non-normality of residuals of a regression model with small size of observations is not

problematic (Gujarati 2004).

(7.3) Stability test.

Figure 3 : CUSUM Stability Test
20

15

10

-5

-10

-15

-20
1980 1985 1990 1995 2000 2005 2010

CUSUM 5% Significance

Figure 4. CUSUM Square Stability Test.

1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
1980 1985 1990 1995 2000 2005 2010

CUSUM of Squares 5% Significance

Cumulative sum of recursive residuals (CUSUM) and cumulative sum of squares of recursive

residual (CUSUM of Squares) tests check whether the parameters of the estimated model are

stable across the sample period. In figure 3 and 4 the blue lines is of CUSUM and red and green
lines are 5% critical lines. The CUSUM and CUSUM Squared lines are within the 5% critical

lines. This clearly indicates the stability of the coefficients during 1972-2013

8. Conclusion and recommended policies:

The main objective of this paper is to explore the impact of urbanization on carbon emission. To

achieve this objective the popular STIRPAT model has been utilized. For a non- spurious

estimation purpose, the STIRPAT model then modified to Error Correction Model under

Autoregressive Distributed Lag (ARDL) model for bound testing proposed by Pesaran, Shin, and

Smith (2001) and Pesaran and Shin (1999). The empirical results revealed that urbanization is

one of the significant driving forces of CO emission in Bangladesh. This result is consistent

with the results of majority of studies dealing with urbanization-Carbon emission relationship in

developing countries, for example Poumanyvong and Kaneko (2010), Martnez-Zarzoso and

Maruotti (2011), Al-Mulali et al. (2013), Dogan and Turkekul (2016), Shahbaz et al. (2016).

According to this study, energy intensity is the most effecting factor of CO emission in

Bangladesh and the urbanization is found to be the second most contributing factor, followed by
Affluence (GDP per capita) and total population, (third and fourth, respectively). Various

diagnostic tests applied in this study have confirmed the robustness of the results.

To combat against the harmful CO, nations around the world have been implementing a wide

range of measures. Based on the literature, I recommend some plausible measures for CO

abatement in urban areas of Bangladesh.

(i) Renewable sources for energy: Solar, wind, and biomass energy generating technologies are

still the best affordable solutions to eliminate the dependencies on fossil fuelthe dominating

source of carbon emission. The energy production from renewable sources is quite low in

Bangladesh. In 2012, for example, according to the WDI data, the electricity production from

renewable sources was only 1.6% of total electricity production. It was 11% during 1990. The

share rate of renewable electricity production to total electricity production is decreasing each

year (see the WDI data or Bangladesh). Since geographically Bangladesh has a very suitable

location and an enough radiation to install large scale solar capacities (Rofiqul Islam, Rabiul

Islam, and Rafiqul Alam Beg 2008) (Ahmed et al. 2014), the slow steps in utilizing the radiation

for generating solar energy would seem unwise. Furthermore, The wind flow in some coastal

regions such as Teknaf, Coxs Bazar, Kutubdia, Patenga Noakhali, Kuakata and Char Fassion, if

utilized properly, can generates energies during AprilSeptember (Rofiqul Islam, Rabiul Islam,

and Rafiqul Alam Beg 2008), to meet some of the nations energy demands and to curb carbon

emission at the same time.

(ii) Vehicle regulations: One way to reduce carbon emissions from passenger vehicles is to set

regulations that limit the carbon emission from vehicles. Many countries are practicing this
method. In European countries, for example, EU 2015 legislation requires that new registered

cars in the EU do not emit more than an average of 130 grams of CO per kilometre (g CO/km).

More precisely, this rule requires that any car that emits about 5.6 litres per 100 km (l/100 km) of

petrol or 4.9 l/100 km of diesel will not be considered for new registration (European

Commission, Climate Action). Such rule concerning with carbon emission, to my best

knowledge, is not implemented in Bangladesh yet. THE MOTOR VEHICLES ORDINANCE,

1983 section 150 states Whoever drives or causes or allows or lets out a motor vehicle for use

in any public place, the smoke of which would constitute a health hazard, shall be punishable

with fine which may extend to two hundred Taka. But this does not however define health

hazard, nor it explicitly include laws for Carbon emission, especially. A carbon emission-limit

on new exported or registered car, and the policy of banning the high emitting vehicles, if

implemented, can perhaps help on-road carbon emission.

(iii) Bi-cycle for short trips: Another effective way to reduce carbon emission and other

greenhouse gas emission in urban area is to induce people to ride bi-cycle instead of riding on

motor vehicles. Some health scientists, such as Lindsay, Macmillan, and Woodward (2011)

suggested replacing motor vehicle riding with bike riding habit can improve public health and

reduce the numbers of air pollution caused death. This new habit, of-course, contributes to save

much energy and to lessen carbon emission and other greenhouse gas emission from vehicles

engines. This new trend in Bangladesh, however, can bring two negative side effects. First,

people whose earnings depend on passenger city motor vehicles will be losers. Second, bicycle

riders may collide with motor vehicles Jacobsen (2003), if the safe lane is not constructed for

bicyclists. To resolve these two shortcomings one may suggest actions to increase the Rickshaw

pulling and to implement the Helmet law for by-cyclists.

The effectiveness of any policy, however, depends on the willingness of urban residents. In

addition to the mentioned policies, government and NGO should create awareness among the

urban residents. Awareness program help make any policy effective. This is because

environmentally aware people are more likely to response positively to environmental policies

and thus make them easier to be implemented. This study suggests to lunch environmental

awareness programs, awareness program for energy conservations, and suggests to build

environmental clubs and environmental organizations across the big cities of Bangladesh,

coupled with any CO and any other greenhouse gas curbing policy.

Appendix A: Descriptive Statistics for the variables.

TableA.1. Descriptive Statistics

lnCt lnAt lnTt lnPt lnUt

Mean 9.75 6.13 -1.28 18.50 2.96
Median 9.77 6.05 -1.27 18.53 3.03
Maximum 11.14 6.78 -1.19 18.87 3.48
Minimum 8.16 5.76 -1.40 18.02 2.10
Std. Dev. 0.86 0.29 0.04 0.26 0.37
Skewness -0.07 0.75 -0.70 -0.27 -0.74
Kurtosis 1.85 2.42 2.88 1.75 2.78
Jarque-Bera 2.33 4.49 3.49 3.25 3.98
Probability 0.31 0.11 0.17 0.19 0.13
Sum 409.6 257.5 -53.6 777 124.4
Sum Sq. Dev. 30.2 3.44 0.1 2.96 5.68
Observations 42 42 42 42 42
Appendix B: ARDL framework for Equation 4.

Ct=0 + 1ilnCt-i + 2i lnAt-i + 3ilnTt-i + 4i lnPt-i+ 5i lnUt-i

+ 6 lnCt-1 + 7 lnAt-i + 8 lnTt-1 + 9 lnPt-1+ 10 lnUt-1 + t (B.1)

Here, 0 indicates intercept and t indicates error term. 1, 2 ,3 , 4 and 4 are

short-run coefficients. 6, 7, 8, 9 and 10 are long-run coefficients. If long-run coefficients

are jointly significant then variables are said to be co-integrated. The results of joint test

were displayed in table 3.

Equation (B.1) is further modified into Error Correction Model

Ct=0 + 1ilnCt-i + 2i lnAt-i + 3ilnTt-i + 4i lnPt-i+ 5i lnUt-i

+ ECTt-1+ t (B.2)

Where, shows the speed of adjustment towards the long-run equilibrium and ECTt-1 denotes

the Error Correction Term which contains the long-run equationthe STIRPAT model or

equation 4. Table 4 displays the results of this long-run equation.

Acknowledgements
I acknowledge the helpful comments of Ahmed Zobayer, Lecturer Department of Economics &
Banking, IIUC.

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