Dynamic Impacts of Economic Growth and Forested Area on Carbon Dioxide Emissions in Malaysia

Rawshan Ara Begum, Asif Raihan and Mohd Nizam Mohd Said
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Rawshan Ara Begum: Institute of Climate Change (IPI), Universiti Kebangsaan Malaysia (UKM), Bangi 43600, Selangor, Malaysia
Asif Raihan: Institute of Climate Change (IPI), Universiti Kebangsaan Malaysia (UKM), Bangi 43600, Selangor, Malaysia
Mohd Nizam Mohd Said: Institute of Climate Change (IPI), Universiti Kebangsaan Malaysia (UKM), Bangi 43600, Selangor, Malaysia

Sustainability, 2020, vol. 12, issue 22, 1-15

Abstract: This study measures the relationship and dynamic impacts of economic growth and forested area on carbon dioxide (CO 2 ) emissions in Malaysia. Time series data over the period of 1990 to 2016 were used by employing the dynamic ordinary least squared (DOLS) approach. The results of DOLS estimation indicate that the coefficient of economic growth is positive and significant with CO 2 emissions, meaning that RM1 million increase in gross domestic product (GDP) is associated with an increase in CO 2 emissions of 0.931 kilo tons. Instead, the long-run coefficient of forested area found negative and significant, which implies that declining one hectare of forested area (i.e., deforestation) has an impact of three kilo tons of CO 2 emissions rise in Malaysia. Our study findings indicate that economic growth and deforested area have an adverse effect on Malaysia’s carbon emissions where GDP growth fosters carbon emissions at a faster rate. Thus, the effective implementation of policy measures and economic instruments including afforestation and reforestation, forest conservation, sustainable forest management, REDD+ (reducing emissions from deforestation and forest degradation plus) mechanism and other emission reduction mechanisms inter alia could be useful for reducing carbon emissions while decreasing deforestation and maintaining the long-term economic growth in Malaysia.

Keywords: forests; deforestation; emissions; economy; DOLS; Malaysia (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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