Academic journal article Global Business and Management Research: An International Journal

The Relationship among Carbon Dioxide Emission, Energy Consumption and Economic Growth in Malaysia

Academic journal article Global Business and Management Research: An International Journal

The Relationship among Carbon Dioxide Emission, Energy Consumption and Economic Growth in Malaysia

Article excerpt

Introduction

Energy is one of the most important process in helping the economic growth in a country. A sufficient and continuous availability of energy input is demanded for sustainability economic growth, which can be made possible if energy intensity declines with the economic growth. The United Nations Framework convention on climate change (UNFCCC) is an international environmental treaty with the goal of achieving stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

Researchers have assessed the impact of global warming on the economy intensively since the 1990s. Over the past two decades, the relationship between economic growth and environmental pollution, as well as economic growth and energy consumption, have been intensively analyzed (Begum et al., 2015; Bekhet & Othman, 2018; Mugableh, 2013). The increasing amount of carbon dioxide emissions, the dominant contributor to the greenhouse effect, seems to be aggravating this problem. Among the greenhouse gases, more than 60% of the greenhouse effect is responsible by carbon dioxide. Thus, previous researcher has intensively assessed the impacts of global warming and climate change on the world economy. In addition, worldwide organizations, such as the United Nations, have been attempting to reduce the adverse impacts of global warming and climate changes through intergovernmental and binding agreement, such as the Kyoto Protocol. The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC).

The global concern for environmental sustainability is apparent in an increasing public mandate, and the development strategy largely depends on whether the enduring economic growth causes environmental degradation or whether such growth is sufficient to compensate for the environmental cost of production or development process. Nevertheless, the inputs in to the development process or production is served by exhaustible natural resource. In some leading countries such Malaysia which the growth and environmental sustainability are concurrently leading, the problem is quite popular.

Thus, by considering to the above mentioned issue, this paper aims to investigate the relationship between carbon dioxide emission, economic growth and energy consumption focusing in Malaysia. The, the reminder of paper is structured as follows. Next section reviews the past studies related to carbon omission with its determinants then followed by data and methodology discussion. In the following section, the paper discusses the results. Finally, concludes the paper and highlights the policy implications.

Literature Review

In the past four decades, a many literatures that discovered the relationship of energy consumption and gross domestic product (GDP) growth has been discussed; however, they reached different conclusions.The relationship between total energy consumption and GDP growth has been investigated by Mahalingam and Orman (2018), Al-Mulali (2014), while some others researcher like Hanif (2018) and Asafu-Adjaye, Byrne, and Alvarez (2016) explored the affiliation between electricity energy consumption and GDP, fossil fuel, energy consumption and GDP and renewable energy consumption and GDP relationship.

Some research that studied on energy consumption-GDP growth relationship. A bi-directional contributing link between energy consumption and GDP growth has been found in some of these studies. The instruction hypothesis which states that energy consumption and GDP growth are mutually determined and affected at the same time has been signified by this correlation. This kind of affiliation was found in the USA (Fallahi, 2011); in Common wealth Independent countries (Apergis & Payne, 2009), in Turkey (Fuinhas & Marques, 2012) in developed countries (Akkemik & Goksal, 2012), in a number of developed and developing countries (Geng et al. …

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