Unveiling the causal link between livestock farming, economic development, and methane emissions in Bangladesh: a VECM investigation

The aim of this study to find the agricultural and economic impacts of growing methane emissions, where livestock index and GDP per capita are the proxy variables to measure the effect of these two sectors, respectively. As methodology, a Vector Error Correction Model (VECM) applies for this research. However, Augmented Dicky Fuller and Phillips–Perron tests pertained to investigate the study variables' in stationary level. This study has investigated the long-run dynamic causal relationship among the study variables by employing co-integration test. Under VECM framework, the short-run dynamics among the variables has been examined. This research study evidenced that livestock agriculture has affirmed the significant positive association with the environmental pollution in both dynamics. According to the long-run estimate, a 1% increase in livestock production results in a 0.29% increase in methane emissions, whereas the short-run estimate results in a 0.14% increase in methane emission. In contrast, economic growth has only confirmed a significant positive effect on environmental degradation in the short term. Furthermore, the outcome of the Granger Causality Test indicates that there exists one-way causality from GDP per capita and livestock production to methane emission. In addition, these findings will help policymakers establish a low methane emission structure by assessing the effect of other study variables that lead to Bangladesh's environmental sustainability.