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The influence of economic, technical, and social aspects on energy-associated CO2 emissions in Malaysia: An extended Kaya identity approach

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  • Pui, Kiew Ling
  • Othman, Jamal

Abstract

The rapid global economic development over the past two decades has been accompanied by rising energy demand and CO2 emission rates. Understanding the driving forces of CO2 emissions is necessary for future energy planning and policy formulation. This paper examines the driving factors behind the increase in CO2 emissions in Malaysia with special focus on the manufacturing, electricity and transportation sectors. The paper extends the Kaya identity by incorporating energy mix, investment efficiency, capital-labor substitution, population-to-employment, urbanization rates, and per capita CO2, along with the standard variables including economic activity, economic structure, and energy intensity. The paper also evaluates if any macroeconomic instability (economic crisis) in the country has led to reduction in emission rates. The study utilizes the latest country data, covering the period 2002–2016. The result shows that, while economic activity is always associated with CO2 emissions, more efficient energy use would help restrain the rise in emission rates without hampering economic growth regardless of economic structure. Emission reduction targets in Malaysia should be reinforced with an appropriate economic restructuring that restrains the economic structure effect. Due to the extensive energy use in the transportation and electricity generation, future emission control should focus more on these sectors.

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  • Pui, Kiew Ling & Othman, Jamal, 2019. "The influence of economic, technical, and social aspects on energy-associated CO2 emissions in Malaysia: An extended Kaya identity approach," Energy, Elsevier, vol. 181(C), pages 468-493.
    • Handle: RePEc:eee:energy:v:181:y:2019:i:c:p:468-493
    DOI: 10.1016/j.energy.2019.05.168
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    1. Thirupathi Rao & Siti Indati Mustapa, 2020. "A Review of Climate Economic Models in Malaysia," Sustainability, MDPI, vol. 13(1), pages 1-20, December.
    2. Eka Sudarmaji & M. Rubiul Yatim & Hindrajid Harsono & Herlan Masrio & Widyaningsih Azizah, 2024. "Quantifying Drivers of GHG Emissions in ASEAN: Modeling CO2 Emissions Using LMDI and ARIMAX Approaches," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 426-435, November.
    3. Daiva Makutėnienė & Algirdas Justinas Staugaitis & Valdemaras Makutėnas & Gunta Grīnberga-Zālīte, 2023. "The Impact of Economic Growth and Urbanisation on Environmental Degradation in the Baltic States: An Extended Kaya Identity," Agriculture, MDPI, vol. 13(9), pages 1-25, September.
    4. Yue Yu & Yishuang Xu, 2023. "The Roles of Carbon Trading System and Sustainable Energy Strategies in Reducing Carbon Emissions—An Empirical Study in China with Panel Data," IJERPH, MDPI, vol. 20(8), pages 1-20, April.
    5. Aktar, Asikha & Alam, Md. Mahmudul & Harun, Mukaramah, 2022. "Energy Efficiency Policies in Malaysia: A Critical Evaluation from the Sustainable Development Perspective," OSF Preprints 9cf3a, Center for Open Science.
    6. Jun Bai & Shixiang Li & Nan Wang & Jianru Shi & Xianmin Li, 2020. "Spatial Spillover Effect of New Energy Development on Economic Growth in Developing Areas of China—An Empirical Test Based on the Spatial Dubin Model," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    7. Nestor Shpak & Solomiya Ohinok & Ihor Kulyniak & W³odzimierz Sroka & Armenia Androniceanu, 2022. "Macroeconomic Indicators and CO2 Emissions in the EU Region," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(61), pages 817-817, August.
    8. Eka Sudarmaji & Noer Azam Achsani & Yandra Arkeman & Idqan Fahmi, 2022. "Decomposition Factors Household Energy Subsidy Consumption in Indonesia: Kaya Identity and Logarithmic Mean Divisia Index Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 355-364.
    9. Alexander Vaninsky, 2021. "Multiobjective restructuring aimed at green economic growth," Environment Systems and Decisions, Springer, vol. 41(1), pages 110-130, March.

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    More about this item

    Keywords

    Emission decomposition in Malaysia; Energy efficiency improvement; Technological innovation; Investment efficiency; Capital-labor substitution; Urban population effects;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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