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Dynamic impact of household consumption on its CO 2 emissions in Malaysia

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  • Kazi Sohag
  • Rawshan Begum
  • Sharifah Abdullah

Abstract

This article aims to measure the dynamic impact of household consumption (final household consumption expenditure, LHC) on CO 2 emission from household’s energy consumption in Malaysia from 1971 to 2010. The estimation of autoregressive distributed lag (ARDL) bounds test confirms a non-monotonic relationship between LHC and residential CO 2 emission. In the long run, there is a positive relationship between LHC and CO 2 emission as well as a negative relationship between quadratic forms of LHC and CO 2 emission which indicates the existence of an inverted U-shaped relationship between these two variables. The analysis also found a similar relationship in both the short and long run. To confirm the non-monotonous relationship, the U test of Sasabuchi–Lind–Mehlum (2010) approach has followed to obtain the sufficient conditions for the existence of inverted U relationship. Moreover, the U test of Sasabuchi–Lind–Mehlum (2010) found that CO 2 emission increases with increasing LHC up to 6.5 units, but it declines with an additional increase of LHC which is also found by the ARDL model. However, the existence of environmental Kuznets curve implies that in the long run, household CO 2 emission declines with the additional increase of household consumption in the Malaysian economy. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Kazi Sohag & Rawshan Begum & Sharifah Abdullah, 2015. "Dynamic impact of household consumption on its CO 2 emissions in Malaysia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(5), pages 1031-1043, October.
    • Handle: RePEc:spr:endesu:v:17:y:2015:i:5:p:1031-1043
    DOI: 10.1007/s10668-014-9588-8
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