Gas Consumption as a Key for Low Carbon State and its Impact on Economic Growth in Malaysia: ARDL Approach

Temitayo B. Majekodunmi, Mohd Shahidan Shaari, Nor Fadzilah Zainal, Nor Hidayah Harun, Abdul Rahim Ridzuan, Noorazeela Zainol Abidin and Nur Hayati Abd Rahman
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Temitayo B. Majekodunmi: Faculty of Business and Communication, Universiti Malaysia Perlis, Malaysia,
Mohd Shahidan Shaari: Faculty of Business and Communication, Universiti Malaysia Perlis, Malaysia,
Nor Fadzilah Zainal: Faculty of Business and Management, Universiti Teknologi MARA, Pulau Pinang Campus, Malaysia,
Nor Hidayah Harun: Faculty of Business and Management, Universiti Teknologi MARA, Pulau Pinang Campus, Malaysia,
Abdul Rahim Ridzuan: Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, Malaysia; & Institute for Big Data Analytics and Artificial Intelligence, Universiti Teknologi MARA, Shah Alam Campus, Malaysia; & Centre for Economic Development and Policy, Universiti Malaysia Sabah, Malaysia; & Institute for Research on Socio Economic Policy, Universiti Teknologi MARA, Malaysia; & Accounting Research Institute, Universiti Teknologi MARA, Shah Alam Campus, Malaysia.
Noorazeela Zainol Abidin: Faculty of Business and Communication, Universiti Malaysia Perlis, Malaysia,
Nur Hayati Abd Rahman: Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, Malaysia,

International Journal of Energy Economics and Policy, 2023, vol. 13, issue 3, 469-477

Abstract: Natural gas consumption contributes the least to CO2 emissions than other non-renewable energy such as oil and coal. Thus, it is important to replace oil in generating economic activities and leading the country towards low carbon state. Despite the environmentally friendly energy, most previous studies did not study gas consumption. Therefore, this study investigates the effects of gas consumption and other selected macroeconomic determinants such as labour, capital, foreign direct investment, trade openness, and financial development on Malaysia's economic growth from 1980 to 2019. The Augmented Distributed Lag (ARDL) approach is employed, and the results show that gas consumption plays a vital role in boosting economic growth in the short and long run. Based on these findings, all economic sectors should consume more natural gas instead of oil, including industries and transportation. This move can conserve the environment and support clean energy for sustainable development. The remaining variables also increased economic growth except for financial development. Based on these outcomes, the country's policymakers can construct a suitable policy that can improve all the potential macroeconomic determinants besides the use of natural gas consumption in accelerating growth in Malaysia.

Keywords: gas consumption; economic growth; sustainable development; low carbon state (search for similar items in EconPapers)
JEL-codes: O11 Q43 Q53 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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