Beyond Traditional Scales: How Green GDP and Conventional GDP Shape Sustainability in Bangladesh

To comprehend the proper estimation of GDP in light of sustainable development, the concept of Green GDP becomes a yardstick. In the field of Bangladesh, this study reconnoiters the short-run and long-run association between Green GDP and economic growth by 21 years of data. After employing Augmented Dickey-Fuller (ADF) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) tests for assessing the stationarity tests, the study employed Johansen-Juselius cointegration, Vector Error Correction Models (VECM), and normalised cointegration analyses. Among the findings, the study explored a steady long-term cointegration, specifically a 14% increase in economic growth corresponding to a 1% increase in Green GDP growth. The empirical model contemplated that environmental sustainability and growth rate are correlated and reinforce each other. Again, the study promotes the assimilation of sustainability into growth schemes, which is consistent with empirical evidence. Despite its limitations, Green GDP is a valuable complement to conventional GDP because it supports green objectives while still allowing for economic growth. The outcome is presented to legislators in developing economies, such as Bangladesh, along with practical insights for balancing economic and conservation priorities.