Carbon Conscious Consumption:  Impact of expenditure and renewable energy in Malaysia

Norashida Othman; Farah Raihana Ismail; Siti Norida Wahab; Safwan Kamal

doi:10.21834/e-bpj.v9i27.5374

Authors

Norashida Othman Department of Economics and Financial Studies, Faculty of Business and Management, University Teknologi MARA, Puncak Alam Campus, 42300, Selangor
Farah Raihana Ismail Department of Marketing and Management, School of Business and Economics (SPE), Universiti Putra Malaysia (UPM), Serdang, Malaysia
Siti Norida Wahab Department of Technology and Supply Chain Management Studies, Faculty of Business and Management, University Teknologi MARA, Puncak Alam Campus 42300, Selangor, Malaysia
Safwan Kamal Department of Zakat dan Waqf Management, Faculty of Islamic Economics and Business, IAIN Langsa, Langsa, Indonesia

DOI:

https://doi.org/10.21834/e-bpj.v9i27.5374

Keywords:

CO2 Emissions, Consumption Expenditure, Renewable Energy Consumption, Auto-regressive Distribution Lag (ARDL)

Abstract

This study aims to assess the impact of domestic consumption and renewable energy on environmental pollutants, with national income (GDP) included as a control variable. Employing the auto-regressive distributed lag (ARDL) econometric technique, the analysis spans time series data from 1990 to 2020. The bound F-test and Johansen cointegration tests validate that domestic consumption substantially contributes to environmental pollution. By addressing existing gaps in knowledge, this research provides valuable insights for shaping sustainable energy policies tailored to the unique circumstances of Malaysia.

References

Abid, A., Mehmood, U., Tariq, S., & Haq, Z. U. (2022). The effect of technological innovation, FDI, and financial development on CO2 emission: evidence from the G8 countries. Environmental Science and Pollution Research, 29(8), 11654-11662. DOI: https://doi.org/10.1007/s11356-021-15993-x

Ahmad, M., & Khattak, S. I. (2020). Is aggregate domestic consumption spending (ADCS) per capita determining CO2 emissions in South Africa? A new perspective. Environmental and Resource Economics, 75(3), 529-552. DOI: https://doi.org/10.1007/s10640-019-00398-9

Akadiri, S. S., & Akadiri, A. C. (2020). Interaction between CO2 emissions, energy consumption and economic growth in the Middle East: panel causality evidence. International Journal of Energy Technology and Policy, 16(2), 105-118. DOI: https://doi.org/10.1504/IJETP.2020.105507

Alola, A. A., Akadiri, S. S., & Usman, O. (2021). Domestic material consumption and greenhouse gas emissions in the EU‐28 countries: Implications for environmental sustainability targets. Sustainable Development, 29(2), 388-397. DOI: https://doi.org/10.1002/sd.2154

Aydemir, O., & Zeren, F. (2017). The impact of foreign direct investment on CO2 emission: evidence from selected G-20 countries. In Handbook of research on global enterprise operations and opportunities. IGI Global. (pp. 81-92). Access on 10th June 2023 DOI: https://doi.org/10.4018/978-1-5225-2245-4.ch005

Bekun, F. V., Alola, A. A., & Sarkodie, S. A. (2019). Toward a sustainable environment: Nexus between CO2 emissions, resource rent, renewable and nonrenewable energy in 16-EU countries. Science of the total Environment, 657, 1023-1029. DOI: https://doi.org/10.1016/j.scitotenv.2018.12.104

Chishti, M. Z., Ahmed, Z., Murshed, M., Namkambe, H. H., & Ulucak, R. (2021). The asymmetric associations between foreign direct investment inflows, terrorism, CO2 emissions, and economic growth: a tale of two shocks. Environmental Science and Pollution Research, 28(48), 69253-69271. DOI: https://doi.org/10.1007/s11356-021-15188-4

Ehigiamusoe, K. U., & Dogan, E. (2022). The role of interaction effect between renewable energy consumption and real income in carbon emissions: evidence from low-income countries. Renewable and Sustainable Energy Reviews, 154, 111883. DOI: https://doi.org/10.1016/j.rser.2021.111883

Khan, A., Chenggang, Y., Hussain, J. & Kui, Z. (2021). Impact of technological innovation, financial development and foreign direct investment on renewable energy, non-renewable energy and the environment in belt & Road Initiative countries. Renewable Energy, 171, 479-491 DOI: https://doi.org/10.1016/j.renene.2021.02.075

Khan, Z., Ali, M., Jinyu, L., Shahbaz, M., & Siqun, Y. (2020). Consumption-based carbon emissions and trade nexus: evidence from nine oil exporting countries. Energy Economics, 89, 104806. DOI: https://doi.org/10.1016/j.eneco.2020.104806

Liu, H., & Song, Y. (2020). Financial development and carbon emissions in China since the recent world financial crisis: Evidence from a spatial-temporal analysis and a spatial Durbin model. Science of the Total Environment, 715, 136771. DOI: https://doi.org/10.1016/j.scitotenv.2020.136771

Liu, J., Murshed, M., Chen, F., Shahbaz, M., Kirikkaleli, D., & Khan, Z. (2021). An empirical analysis of the household consumption-induced carbon emissions in China. Sustainable Production and Consumption, 26, 943-957. DOI: https://doi.org/10.1016/j.spc.2021.01.006

Murshed, M., Rahman, M., Alam, M. S., Ahmad, P., & Dagar, V. (2021). The nexus between environmental regulations, economic growth, and environmental sustainability: linking environmental patents to ecological footprint reduction in South Asia. Environmental Science and Pollution Research, 28(36), 49967-49988 DOI: https://doi.org/10.1007/s11356-021-13381-z

Raihan, A., Begum, R. A., Said, M. N. M., & Pereira, J. J. (2022). Relationship between economic growth, renewable energy use, technological innovation, and carbon emission toward achieving Malaysia’s Paris agreement. Environment Systems and Decisions, 42(4), 586-607. DOI: https://doi.org/10.1007/s10669-022-09848-0

Sarkodie, S. A. (2020). Causal effect of environmental factors, economic indicators and domestic material consumption using frequency domain causality test. Science of the Total Environment, 736, 139602. DOI: https://doi.org/10.1016/j.scitotenv.2020.139602

Sun, Y., Li, H., Andlib, Z., & Genie, M. G. (2022). How do renewable energy and urbanization cause carbon emissions? Evidence from advanced panel estimation techniques. Renewable Energy, 185, 996-1005. DOI: https://doi.org/10.1016/j.renene.2021.12.112

Usman, A., Ullah, S., Ozturk, I., Chishti, M. Z., & Zafar, S. M. (2020). Analysis of asymmetries in the nexus among clean energy and environmental quality in Pakistan. Environmental Science and Pollution Research, 27, 20736-20747. DOI: https://doi.org/10.1007/s11356-020-08372-5

Uzair Ali, M., Gong, Z., Ali, M. U., Asmi, F., & Muhammad, R. (2022). CO2 emission, economic development, fossil fuel consumption and population density in India, Pakistan and Bangladesh: a panel investigation. International Journal of Finance & Economics, 27(1), 18-31. DOI: https://doi.org/10.1002/ijfe.2134

Xu, X., Huang, S., An, H., Vigne, S., & Lucey, B. (2021). The influence pathways of financial development on environmental quality: New evidence from smooth transition regression models. Renewable and Sustainable Energy Reviews, 151, 111576. DOI: https://doi.org/10.1016/j.rser.2021.111576

Zafar, M. W., Shahbaz, M., Hou, F., & Sinha, A. (2019). From nonrenewable to renewable energy and its impact on economic growth: the role of research & development expenditures in Asia-Pacific Economic Cooperation countries. Journal of Cleaner Production, 212, 1166-1178. DOI: https://doi.org/10.1016/j.jclepro.2018.12.081