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Energy Consumption, CO2 Emissions and Economic Growth: A Causality Analysis for Malaysian Industrial Sector

Author

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  • Chiang-Ching Tan

    (School of Business and Management, University College of Technology Sarawak, 96000 Sibu, Sarawak, Malaysia,)

  • Syvester Tan

    (Department of Economics, Faculty of Economics and Business, Universiti Malaysia Sarawak, 94300 Kota Samarahan, Malaysia.)

Abstract

Malaysia is currently a developing country which is from agriculture based to manufacturing and service-based economy by implementing Industrialisation Plan in 1985. Thus, the country is consuming more energy due to the rapid industralisation hoping to fully transform into a fully industralised country in future. It is decisive for the government to develop policies to minimize energy consumption and reducing CO2 emissions to protect the environment without impairing the economy. The study looks into the causal relationship between real income (Y), energy consumption (EC) and carbon dioxide (CO2) emission in Malaysian industrial sector during the period of 1980-2014, by applying the time-series econometric techniques. Major findings of this paper consists of long-run relationship exists between Y, EC and CO2 emissions; unidirectional causality relationship from EC and CO2 emissions to Y in both short and long-run; and results of the variance decompositions suggest that the impact of Y and EC towards CO2emissions becomes noticeable only over the longer period of time.

Suggested Citation

  • Chiang-Ching Tan & Syvester Tan, 2018. "Energy Consumption, CO2 Emissions and Economic Growth: A Causality Analysis for Malaysian Industrial Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 254-258.
  • Handle: RePEc:eco:journ2:2018-04-32
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    References listed on IDEAS

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    Cited by:

    1. Karen Fernandes & Y. V. Reddy, 2020. "Energy Consumption and Economic Growth in Newly Industrialised Countries of Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 384-391.
    2. Wajahat Ali & Inam Ur Rahman & Muhammad Zahid & Muhammad Anees Khan & Tafazal Kumail, 2020. "Do technology and structural changes favour environment in Malaysia: an ARDL-based evidence for environmental Kuznets curve," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7927-7950, December.
    3. Nuno Carlos Leitão & Jeremiás Máté Balogh, 2020. "The Impact of Energy Consumption and Agricultural Production on Carbon Dioxide Emissions in Portugal," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(1), March.

    More about this item

    Keywords

    Industrial Sector; Energy Consumption; Carbon Dioxide Emission;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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