Environmental Sustainability in Bangladesh trough renewable energy, foreign direct investment, and trade openness: Evidence from Load Capacity Factor and Inverted Load Capacity factor with Fourier Functions

This study investigates the effect of renewable energy consumption (REC), trade openness (TO), and foreign direct investment on environmental sustainability in Bangladesh during 1990–2022. For this purpose, it uses innovative input parameters, Load Capacity Factor (LCF) and Inverted LCF as performance indicators. The study adopts Fourier ARDL and the Fourier NARDL method to investigate the symmetric and asymmetric effects of REC, TO, and FDI on environmental sustainability in Bangladesh, which is a distinctive feature compared with other studies. This procedure can represent complex non-linear relationships between these two variables by invoking Fourier functions, elucidating a more complete picture of economic growth and environmental impact dynamics. Specifically, the results reveal that both REC and TO positively associate with environmental sustainability via lower CO ² emissions and ecological footprints. At the same time, FDI has an intricate relationship feature that exhibits non-linear impacts. The study findings provide a fresh look at the existing EKC hypothesis regarding environmental quality deterioration and the adoption of cleaner technology that is associated with economic growth through LCF. Results highlight the necessity of ad-hoc, effective, and sustainable energy policies, investment in renewables and green energies, as well as regarding trade practices. The results provide some policy insights on improving energy efficiency and achieving sustainable development. Policymakers need to embrace green technologies and pursue politics to enhance economic prospects while maintaining balance with the environment. The implications of the study are significant to consider for Bangladesh to reach its SDGs and achieve sustainability.