Green Growth and Human Capital in Bangladesh: Evaluating the Roles of Financial Development and Foreign Direct Investment in Reducing Carbon Emissions

Abstract

This paper thoroughly investigates how green growth, FDI, human capital, and broader financial expansion affect carbon releases in Bangladesh, covering the years 1980 through 2022 precisely. Using an Auto-Regressive Distributed Lag framework solidly grounded in green finance and financial development theory, this study offers a detailed inquiry into both short-run and long-run relational dynamics overall. Results convincingly reveal that green growth markedly fosters ecological sustainability by boosting eco-friendly methods and funding progressive innovations specifically aimed at cutting carbon discharge. Moreover, the assessment thoroughly highlights human capital’s vital function as a cornerstone of environmental achievement, strongly implying that a knowledgeable, proficient labor force is absolutely imperative for implementing and upholding enduring green measures. Conversely, although foreign direct investment exhibits a beneficial overall effect, its contribution to Bangladesh’s environmental state has remained modest. These findings strongly prompt appeals for policymakers to merge financial development with economic strategies, ensuring ecological protection while preserving ongoing economic advancement. By diligently cultivating enduring human capital growth and applying inclusive investment promotion initiatives, Bangladesh can attain both ecological and financial gains.