The Impact of Energy Consumption, Economic Growth, and Non-Renewable Energy on Carbon Dioxide Emission in Malaysia

Abstract

Human activities such as burning fossil fuels, deforestation, and economic growth are increasingly affecting the climate and temperature of the earth. Large amounts of greenhouse gases in the atmosphere have increased the greenhouse effect and global warming. By 2020, the concentration of greenhouse gases in the atmosphere has increased to 48% above its pre-industrial level. The main objectives of this study are to determine the level and the pattern of the relationship between dependent and independent variables. Also, this study examines the long-term and short-term impacts of energy consumption, economic growth, and non-renewable energy on carbon dioxide (CO2) emissions in Malaysia. Due to increased industrialization, Malaysia faces significant problems, such as environmental pollution. This study uses annual time series data from 1986 to 2021 and is analyzed using the Autoregressive Distributed Lag approach. The study suggests that energy consumption, economic growth, and non-renewable energy positively impact carbon dioxide (CO2) emissions. The results through dynamic ARDL indicate that energy consumption, economic growth, and non-renewable energy positively impact Malaysia’s carbon dioxide (CO2) emissions in the short-run and long run. The error correction model (ECM) provides short- run shocks in these variables and establishes equilibrium relations in the long run. Therefore, policymakers should consider implementing a carbon tax to be enforced on polluters to prevent ecological pollution at a minimum for the short-term regulation of carbon dioxide (CO2) emissions.