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Abstract
Abstract. This research paper conducts a comprehensive analysis of the complex relationship between CO2 emissions and economic factors, specifically investigating the Environmental Kuznets Curve (EKC) theory in Malaysia. Using data from 1991 to 2020, the study applies the Autoregressive Distributed Lag (ARDL) modelling approach developed by Pesaran et al. (2001). The results demonstrate a significant long-term connection between Gross Domestic Product (GDP), trade, and carbon emissions, indicating that economic development plays a crucial role in influencing Malaysia's carbon footprint. Additionally, the inclusion of institutional quality in the model adds another layer of complexity, highlighting the multifaceted nature of the relationship between economic progress and environmental outcomes. Furthermore, examining short-term dynamics using the ARDL model reveals diverse effects over time for variables such as renewable energy and institutional quality, providing a more nuanced understanding of these relationships. These detailed insights are essential for policymakers dealing with the challenges of promoting economic progress while ensuring environmental sustainability. The findings contribute to a deeper understanding of the interplay between economic variables and CO2 emissions, offering valuable guidance for policymakers striving to strike a balance between economic growth and environmental conservation in Malaysia.
Keywords: Malaysia, autoregressive distributed lag (ardl) modelling, environmental kuznets curve (ekc), carbon dioxide (co2) emissions, gross domestic product (gdp), renewable energy (ren), institutional quality (iq), trade (tr)
Keywords
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This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Copyright @2017. This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License (http://creativecommons.org/licenses/by-nc-sa/4.0/) which permits unrestricted non-commercial used, distribution and reproduction in any medium
References
- References
- Acquah, H. D.-G. (2010). Comparison of Akaike information criterion (AIC) and Bayesian information criterion (BIC) in selection of an asymmetric price relationship. Journal of Development Agricultural Economics, 2(1), 001-006.
- Adebola Solarin, S., Al-Mulali, U., and Ozturk, I. (2017). Validating the Environmental Kuznets Curve Hypothesis in India and China: The Role of Hydroelectricity Consumption. Renew. Sust. Energ. Rev. 80, 1578–1587. doi:10.1016/j.rser.2017.07.028
- ASEAN Secretary 2019, ASEAN Economic Integration Brief, 06, Available at: https://asean.org/wp-content/uploads/2021/08/AEIB_6th_Issue.pdf
- Bartlett Aa (1994) reflections on sustainability, population growth, and the environment-revised. popul environ 16(1):5–35
- Farzanegan, M. R., and Markwardt, G. (2018). Development and Pollution in the Middle East and North Africa: Democracy Matters. J. Pol. Model. 40 (2), 350–374. doi:10.1016/j.jpolmod.2018.01.010
- Grossman, G.M. And Krueger, A.B. (1991) environmental impacts of a North American Free Trade Agreement, Nber. doi:10.3386/w3914
- Grossman Gm, Krueger Ab (1995) economic growth and the environment. Q J Econ 110:353–77. doi:https://doi.org/10.2307/2118443
- Gill, A. R., Viswanathan, K. K., & Hassan, S. (2018). The Environmental Kuznets Curve (EKC) and the environmental problem of the day. Renewable Sustainable Energy Reviews, 81, 1636-1642. doi:10.1016/j.rser.2017.05.247
- Heidari, H, Katircioglu, ST, & Saeidpour, L 2015, ‘Eco- ˘ nomic growth, CO2 emissions, and energy consumption in the five ASEAN countries’, International Journal of Electrical Power & Energy Systems, vol. 64, pp. 785-791. doi:https://doi.org/10.1016/j.ijepes.2014.07.081.
- Holtz-Eakin, D., & Selden, T. M. (1995). Stoking the fires? CO2 emissions and economic growth. Journal of public economics, 57(1), 85-101.
- Khan, M. K., Teng, J.-Z., & Khan, M. I. (2019). Effect of energy consumption and economic growth on carbon dioxide emissions in Pakistan with dynamic ARDL simulations approach. Environmental Science Pollution Research, 26(23), 23480-23490.
- Le, H. P., and Ozturk, I. (2020). The Impacts of Globalization, Financial Development, Government Expenditures, and Institutional Quality on CO2 Emissions in the Presence of Environmental Kuznets Curve. Environ. Sci. Pollut. Res. 27 (18), 22680–22697. doi:10.1007/s11356-020-08812-2.
- Malaysia Energy Information. Enerdata. (2023). Available at : https://www.enerdata.net/estore/energy-market/malaysia/
- Malaysia – UNFCCC (2020). Available at: https://unfccc.int/sites/default/files/resource/MALAYSIA_BUR3-UNFCCC_Submission.pdf
- Mikayilov, J. I., Galeotti, M., & Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. doi:https://doi.org/10.1016/j.jclepro.2018.06.269
- National Institute of Standards and Technology, NIST (2023) Jarque Bera Test. Available at: https://www.itl.nist.gov/div898/software/dataplot/refman1/auxillar/jarqbera.htm
- National Institute of Standards and Technology, NIST (2015). measures of skewness and Kurtosis. Available at: https://www.itl.nist.gov/div898/handbook/eda/section3/eda35b.htm
- Namahoro, JP, Wu, Q, Xiao, H, & Zhou, N 2021, ‘The impact of renewable energy, economic and population growth on CO2 emissions in the East African region: Evidence from common correlated effect means group and asymmetric analysis’, Energies, vol. 14, no. 2, pp. 312. doi:https://doi.org/10.3390/en14020312
- Nirajan, K. (2023) Jarque-Bera test: Guide to testing normality with statistical accuracy, Dataaspirant. Available at: https://dataaspirant.com/jarque-bera-test/#:~:text=Use%20statistical%20software%20to%20calculate,rejected%2C%20indicating%20non%2Dnormality
- Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326. doi:https://doi.org/10.1002/jae.616
- Polanitzer, R. (2021) Data science one on one - part 14: Normality testing and the jarque-bera test, Medium. Available at: https://medium.com/@polanitzer/data-science-one-on-one-part-14-normality-testing-and-the-jarque-bera-test-701712e0b53b
- Radmehr, R, Rastegari, S, & Shayanmehr, S 2021, ‘Renewable energy consumption, CO2 emissions, and economic growth Nexus: A simultaneity spatial modeling analysis of EU countries’, Structural Change and Economic Dynamics, vol. 57, pp. 13-27. doi: https://doi.org/10.1016/j.strueco.2021.01.006.
- Rongrong Li, Qiang Wang, Yi Liu, Rui Jiang (2021) per-capita carbon emissions in 147 countries: the effect of economic, energy, social, and trade structural changes, sustainable production and consumption. doi:https://doi.org/10.1016/j.spc.2021.02.031
- Saboori, B, & Sulaiman, J 2013b, ‘Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia’, Energy Policy, vol. 60, pp. 892-905. doi:http://dx.doi.org/10.1016/j.enpol.2013.05.099
- Shah, W. U. H., Yasmeen, R., and Padda, I. U. H. (2019). An Analysis between Financial Development, Institutions, and the Environment: a Global View. Environ. Sci. Pollut. Res. 26 (21), 21437–21449. doi:https://doi.org/10.1007/s11356-019-05450-1
- Shahzad, U., Ferraz, D., Doğan, B., and Aparecida do Nascimento Rebelatto, D. (2020). Export Product Diversification and CO2 Emissions: Contextual Evidences from Developing and Developed Economies. J. Clean. Prod. 276, 124146. doi:https://doi.org/10.1016/j.jclepro.2020.124146
- Shahzad, U. (2020). Environmental Taxes, Energy Consumption, and Environmental Quality: Theoretical Survey with Policy Implications. Environ. Sci. Pollut. Res. 27 (Issue 20), 24848–24862. doi:https://doi.org/10.1007/s11356-020-08349-4
- Shahzad, U., Lv, Y., Doğan, B., and Xia, W. (2021). Unveiling the Heterogeneous Impacts of export Product Diversification on Renewable Energy Consumption: New Evidence from G-7 and E-7 Countries. Renew. Energ. 164, 1457–1470. doi:https://doi.org/10.1016/j.renene.2020.10.143
- Ugur K. P. Et Al. (2018) the influence of coal and noncarbohydrate energy consumption on CO2 emissions: revisiting the Environmental Kuznets Curve hypothesis for Turkey, energy. doi:https://doi.org/10.1016/j.energy.2018.07.095
- World Bank (2023) - CO2 emissions (metric tons per capita). Available at: https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?locations=MY
- World Bank (2023) - Control of Corruption: Estimate. Available at: https://data.worldbank.org/indicator/CC.EST?locations=MY
- World Bank (2023) - Government effectiveness: Estimate. Available at: https://data.worldbank.org/indicator/GE.EST?locations=MY
- World Bank (2023) - GDP per capita (current US$). Available at: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
- World Bank (2023) - Political stability and absence of violence/terrorism: Estimate. Available at: https://data.worldbank.org/indicator/PV.EST?locations=MY
- World Bank (2023) - Regulatory quality: Estimate. Available at: https://data.worldbank.org/indicator/RQ.EST?locations=MY
- World Bank (2023) - Renewable energy consumption (% of total final energy consumption). Available at: https://data.worldbank.org/indicator/EG.FEC.RNEW.ZS?locations=MY
- World Bank (2023) - Rule of law: Estimate. Available at: https://data.worldbank.org/indicator/RL.EST?locations=MY
- World Bank (2023) - Trade (% of GDP). Available at: https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS?locations=My
- World Bank (2023) - Voice and accountability: Estimate. Available at: https://data.worldbank.org/indicator/VA.EST?locations=MY
References
References
Acquah, H. D.-G. (2010). Comparison of Akaike information criterion (AIC) and Bayesian information criterion (BIC) in selection of an asymmetric price relationship. Journal of Development Agricultural Economics, 2(1), 001-006.
Adebola Solarin, S., Al-Mulali, U., and Ozturk, I. (2017). Validating the Environmental Kuznets Curve Hypothesis in India and China: The Role of Hydroelectricity Consumption. Renew. Sust. Energ. Rev. 80, 1578–1587. doi:10.1016/j.rser.2017.07.028
ASEAN Secretary 2019, ASEAN Economic Integration Brief, 06, Available at: https://asean.org/wp-content/uploads/2021/08/AEIB_6th_Issue.pdf
Bartlett Aa (1994) reflections on sustainability, population growth, and the environment-revised. popul environ 16(1):5–35
Farzanegan, M. R., and Markwardt, G. (2018). Development and Pollution in the Middle East and North Africa: Democracy Matters. J. Pol. Model. 40 (2), 350–374. doi:10.1016/j.jpolmod.2018.01.010
Grossman, G.M. And Krueger, A.B. (1991) environmental impacts of a North American Free Trade Agreement, Nber. doi:10.3386/w3914
Grossman Gm, Krueger Ab (1995) economic growth and the environment. Q J Econ 110:353–77. doi:https://doi.org/10.2307/2118443
Gill, A. R., Viswanathan, K. K., & Hassan, S. (2018). The Environmental Kuznets Curve (EKC) and the environmental problem of the day. Renewable Sustainable Energy Reviews, 81, 1636-1642. doi:10.1016/j.rser.2017.05.247
Heidari, H, Katircioglu, ST, & Saeidpour, L 2015, ‘Eco- ˘ nomic growth, CO2 emissions, and energy consumption in the five ASEAN countries’, International Journal of Electrical Power & Energy Systems, vol. 64, pp. 785-791. doi:https://doi.org/10.1016/j.ijepes.2014.07.081.
Holtz-Eakin, D., & Selden, T. M. (1995). Stoking the fires? CO2 emissions and economic growth. Journal of public economics, 57(1), 85-101.
Khan, M. K., Teng, J.-Z., & Khan, M. I. (2019). Effect of energy consumption and economic growth on carbon dioxide emissions in Pakistan with dynamic ARDL simulations approach. Environmental Science Pollution Research, 26(23), 23480-23490.
Le, H. P., and Ozturk, I. (2020). The Impacts of Globalization, Financial Development, Government Expenditures, and Institutional Quality on CO2 Emissions in the Presence of Environmental Kuznets Curve. Environ. Sci. Pollut. Res. 27 (18), 22680–22697. doi:10.1007/s11356-020-08812-2.
Malaysia Energy Information. Enerdata. (2023). Available at : https://www.enerdata.net/estore/energy-market/malaysia/
Malaysia – UNFCCC (2020). Available at: https://unfccc.int/sites/default/files/resource/MALAYSIA_BUR3-UNFCCC_Submission.pdf
Mikayilov, J. I., Galeotti, M., & Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. doi:https://doi.org/10.1016/j.jclepro.2018.06.269
National Institute of Standards and Technology, NIST (2023) Jarque Bera Test. Available at: https://www.itl.nist.gov/div898/software/dataplot/refman1/auxillar/jarqbera.htm
National Institute of Standards and Technology, NIST (2015). measures of skewness and Kurtosis. Available at: https://www.itl.nist.gov/div898/handbook/eda/section3/eda35b.htm
Namahoro, JP, Wu, Q, Xiao, H, & Zhou, N 2021, ‘The impact of renewable energy, economic and population growth on CO2 emissions in the East African region: Evidence from common correlated effect means group and asymmetric analysis’, Energies, vol. 14, no. 2, pp. 312. doi:https://doi.org/10.3390/en14020312
Nirajan, K. (2023) Jarque-Bera test: Guide to testing normality with statistical accuracy, Dataaspirant. Available at: https://dataaspirant.com/jarque-bera-test/#:~:text=Use%20statistical%20software%20to%20calculate,rejected%2C%20indicating%20non%2Dnormality
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326. doi:https://doi.org/10.1002/jae.616
Polanitzer, R. (2021) Data science one on one - part 14: Normality testing and the jarque-bera test, Medium. Available at: https://medium.com/@polanitzer/data-science-one-on-one-part-14-normality-testing-and-the-jarque-bera-test-701712e0b53b
Radmehr, R, Rastegari, S, & Shayanmehr, S 2021, ‘Renewable energy consumption, CO2 emissions, and economic growth Nexus: A simultaneity spatial modeling analysis of EU countries’, Structural Change and Economic Dynamics, vol. 57, pp. 13-27. doi: https://doi.org/10.1016/j.strueco.2021.01.006.
Rongrong Li, Qiang Wang, Yi Liu, Rui Jiang (2021) per-capita carbon emissions in 147 countries: the effect of economic, energy, social, and trade structural changes, sustainable production and consumption. doi:https://doi.org/10.1016/j.spc.2021.02.031
Saboori, B, & Sulaiman, J 2013b, ‘Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia’, Energy Policy, vol. 60, pp. 892-905. doi:http://dx.doi.org/10.1016/j.enpol.2013.05.099
Shah, W. U. H., Yasmeen, R., and Padda, I. U. H. (2019). An Analysis between Financial Development, Institutions, and the Environment: a Global View. Environ. Sci. Pollut. Res. 26 (21), 21437–21449. doi:https://doi.org/10.1007/s11356-019-05450-1
Shahzad, U., Ferraz, D., Doğan, B., and Aparecida do Nascimento Rebelatto, D. (2020). Export Product Diversification and CO2 Emissions: Contextual Evidences from Developing and Developed Economies. J. Clean. Prod. 276, 124146. doi:https://doi.org/10.1016/j.jclepro.2020.124146
Shahzad, U. (2020). Environmental Taxes, Energy Consumption, and Environmental Quality: Theoretical Survey with Policy Implications. Environ. Sci. Pollut. Res. 27 (Issue 20), 24848–24862. doi:https://doi.org/10.1007/s11356-020-08349-4
Shahzad, U., Lv, Y., Doğan, B., and Xia, W. (2021). Unveiling the Heterogeneous Impacts of export Product Diversification on Renewable Energy Consumption: New Evidence from G-7 and E-7 Countries. Renew. Energ. 164, 1457–1470. doi:https://doi.org/10.1016/j.renene.2020.10.143
Ugur K. P. Et Al. (2018) the influence of coal and noncarbohydrate energy consumption on CO2 emissions: revisiting the Environmental Kuznets Curve hypothesis for Turkey, energy. doi:https://doi.org/10.1016/j.energy.2018.07.095
World Bank (2023) - CO2 emissions (metric tons per capita). Available at: https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?locations=MY
World Bank (2023) - Control of Corruption: Estimate. Available at: https://data.worldbank.org/indicator/CC.EST?locations=MY
World Bank (2023) - Government effectiveness: Estimate. Available at: https://data.worldbank.org/indicator/GE.EST?locations=MY
World Bank (2023) - GDP per capita (current US$). Available at: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
World Bank (2023) - Political stability and absence of violence/terrorism: Estimate. Available at: https://data.worldbank.org/indicator/PV.EST?locations=MY
World Bank (2023) - Regulatory quality: Estimate. Available at: https://data.worldbank.org/indicator/RQ.EST?locations=MY
World Bank (2023) - Renewable energy consumption (% of total final energy consumption). Available at: https://data.worldbank.org/indicator/EG.FEC.RNEW.ZS?locations=MY
World Bank (2023) - Rule of law: Estimate. Available at: https://data.worldbank.org/indicator/RL.EST?locations=MY
World Bank (2023) - Trade (% of GDP). Available at: https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS?locations=My
World Bank (2023) - Voice and accountability: Estimate. Available at: https://data.worldbank.org/indicator/VA.EST?locations=MY