ISSN: 2226-3624
Open access
Energy is a crucial factor of production, especially for the industrial sector where it is playing a vital role in substituting labour input in technological processes. Energy is still crucial for advancing Malaysia’s socioeconomic development and prosperity as well as for propelling the industrial revolution. This study explores the causal relationships between real income (Y), energy consumption (both aggregate and disaggregate), CO2 emissions (both aggregate and disaggregate), and employment in Malaysia’s industrial sector during the period of 1982-2019. By applying the time-series econometric techniques, this study discovered unidirectional causality from Y, CO2 emissions, and employment to gas energy consumption over the long run. In the short run, the study identified causality from (i) employment to energy consumption for coal, oil, and all aggregates; (ii) Y to CO2 emissions for coal and aggregates; (iii) Y to energy consumption for coal and oil; and (iv) employment to CO2 emissions for aggregates. Furthermore, there is a bidirectional short run causal relationship between Y and aggregate energy consumption as well as between coal energy consumption and CO2 emissions.
Alsarayreh, M. M. M., AlSuwaidi, M. F., Al Sharif, R. A., & Kutty, A. A. (2020). The factors affecting CO2 emission in the European Union countries: A statistical approach to sustainability across the food industry. In 2020 IEEE 7th International Conference on Industrial Engineering and Applications (ICIEA) (pp. 599-604). IEEE
Ameyaw, B., & Yao, L. (2018). Analyzing the impact of GDP on CO2 emissions and forecasting Africa’s total CO2 emissions with non-assumption driven bidirectional long short-term memory. Sustainability, 10, 1-23.
Ang, J. B. (2008). Economic development, pollutant emissions and energy consumption in Malaysia. Journal of Policy Modeling, 30, 271-278.
Apinran, M. O., Usman, N., Akadiri, S. S., & Onuzo, C. I. (2021). The role of electricity consumption, capital, labor force, carbon emissions on economic growth: implication for environmental sustainability targets in Nigeria. Environmental Science and Pollution Research, 29, 15955-15965.
Azer, I., Hamzah, H. C., Mohamad, S. A., & Abdullah, H. (2016). Contribution of economic sectors to Malaysian GDP. In Abdullah, M.A., Yahya, W.K., Ramli, N., Mohamed, S.R. & Ahmad, E. (Ed). Regional Conference on Science, Technology and Social Sciences (RCSTSS 2014): Business and Social Sciences. Singapore: Springer.
Begum, R. A., Sohag, K., Abdullah, S. M. S., & Jaafar, M. (2015). CO2 emissions, energy consumption, economic and population growth in Malaysia. Renewable and Sustainable Energy Reviews, 41, 594-601.
Petroleum, B. (BP). (2022). BP Statistical Review of World Energy, 71th Edition. United Kingdom: British Petroleum.
Chandran, V. G. R., & Tang, C. F. (2013). The impact of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies. Renewable and Sustainable Energy Reviews, 24, 445-453.
Dickey, D. A., & Fuller, W. A. (1979). Estimators for Autoregressive Time Series with a Unit Root. Journal of American Statistical Association, 74, 427-431.?
Dissanayake, H., Perera, N., Abeykoon, S., Samson, D., Jayathilaka, R., Jayasinghe, M., & Yapa, S. (2023). Nexus between carbon emissions, energy consumption, and economic growth: Evidence from global economies. PLOS ONE, 18: e0287579. https://doi.org/10.1371/journal.pone.0287579
Granger, C. W. (1988). Some recent development in a concept of causality. Journal of Econometrics, 39, 199-211.
Hussin, F., & Ching, C. W. (2013). The contribution of economic sectors to economic growth: The cases of Malaysia and China. International Journal of Academic Research in Economics and Management Sciences, 2, 2226–3624.
Islam, R., Ghani, A. B., & Mahyudin, E. (2017). Carbon dioxide emission, energy consumption, economic growth, population, poverty and forest area: Evidence from panel data analysis. International Journal of Energy Economics and Policy, 7, 99- 106.
Johansen, S., & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration- With Applications to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52, 169-210.
Kraft, J., & Kraft, A. (1978). On the Relationship between Energy and GNP. Journal of Energy and Development, 3, 401-403.?
Kwiatkowski, D., Phillips, P. C. B., Schmidt, P., & Shin, Y. (1992). Testing the Null Hypothesis of Stationarity against the Alternative of Unit Root: How Sure Are We that the Economic Time Series Have a Unit Root? Journal of Time Series Analysis, 23, 667-685.
Lau, E., Tan, C. C., & Tang, C. F. (2016). Dynamic linkages among hydroelectricity consumption, economic growth, and carbon dioxide emission in Malaysia. Energy Sources, Part B: Economics, Planning, and Policy, 11, 1042-1049.
Mensah, I. A., Sun, M., Gao, C., Omari-Sasu, A. Y., Zhu, D., Ampimah, B. C., & Quarcoo, A. (2019). Analysis on the nexus of economic growth, fossil fuel energy consumption, CO2 Emissions and oil price in Africa based on a PMG panel ARDL approach. Journal of Cleaner Production, 228, 161-174.
Menyah, K., & Wolde-Rufael, Y. (2010). Energy consumption, pollutant emissions and economic growth in South Africa. Energy Econ., 32, 1374-1382.
Mitic, P., Fedajev, A., Radulescu, M., & Rehman, A. (2022). The relationship between CO2 emissions, economic growth, available energy, and employment in SEE countries. Environmental Science and Pollution Research, 30, 16140-16155.
Nain, M. Z., Ahmad, W., & Kamaiah, B. (2015). Economic growth, energy consumption and CO2 emissions in India: a disaggregated causal analysis. International Journal of Sustainable Energy, 36, 807-824.
Nkengfack, H., & Fotio, H. K. (2019). Energy Consumption, Economic Growth and Carbon Emissions: Evidence from the Top Three Emitters in Africa. Modern Economy, 10, 52-71.
Osobajo, O. A., Otitoju, A., Otitoju, M. A., & Oke, A. (2020). The impact of energy consumption and economic growth on Carbon Dioxide emissions. Sustainability, 12, 1-16.
Pokrovski, V. N. (2003). Energy in the theory of production. Energy, 28, 769-788.
Saboori, B., & Sulaiman, J. (2013). Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia. Energy Policy, 60, 892-905.
Stern, D. I. (2000). A multivariate cointegration analysis of the role of energy in the US macroeconomy. Energy Economics, 22, 267-283.
Sulaiman, C., & Abdul-Rahim, A. S. (2018). Population growth and CO2 emission in Nigeria: A recursive ARDL approach. Sage Open, 8, 1-14.
Tan, C. C., & Tan, S. (2018). Energy consumption, CO2 emissions and economic growth: a causality analysis for Malaysian industrial sector. International Journal of Energy Economics and Policy, 8, 254-258.
Tong, T., Ortiz, J., Xu, C., & Li, F. (2020). Economic growth, energy consumption, and carbon dioxide emissions in the E7 countries: a bootstrap ARDL bound test. Energy, Sustainability and Society, 10, 1-17.
Valadkhani, A., Smyth, R., & Nguyen, J. (2019). Effects of primary energy consumption on CO2 emissions under optimal thresholds: Evidence from sixty countries over the last half century. Energy Economics, 80, 680- 690.
World Bank. (2024). World Development Indicators 2024. Washington, DC, United States: World Bank.
Zhou, R. (2023). Economic growth, energy consumption and CO2 emissions—An empirical study based on the Yangtze River economic belt of China. Heliyon, 9: e19865. https://doi.org/10.1016/j.heliyon.2023.e19865
Tan, C.-C., & Ling, P.-S. (2024). Dynamic Interaction between Energy Consumption, CO2 Emissions and Economic Growth in Malaysian Industrial Sector: An Aggregate and Disaggregate Analysis. International Journal of Academic Research in Economics and Management Sciences, 13(4), 320–330.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode