Relationship between economic growth, renewable energy use, technological innovation, and carbon emission toward achieving Malaysia’s Paris agreement

Asif Raihan (), Rawshan Ara Begum, Mohd Nizam Mohd Said and Joy Jacqueline Pereira ()
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Asif Raihan: Universiti Kebangsaan Malaysia
Rawshan Ara Begum: Centre for Corporate Sustainability and Environmental Finance, Macquarie University
Mohd Nizam Mohd Said: Universiti Kebangsaan Malaysia
Joy Jacqueline Pereira: Universiti Kebangsaan Malaysia

Environment Systems and Decisions, 2022, vol. 42, issue 4, 586-607

Abstract: Abstract Global climate change caused by greenhouse gases (GHGs), particularly carbon dioxide (CO2) emissions, poses incomparable threats to the environment, development, and sustainability. This research investigates the potential of economic growth, renewable energy use, and technological innovation to achieve Malaysia’s Paris Agreement by reducing CO2 emissions. Time-series data from 1990 to 2019 were utilized applying the Dynamic Ordinary Least Squares (DOLS) method. The empirical findings show that the coefficient of economic growth is positive and significant with CO2 emissions, indicating a 1% increase in economic growth is related to a 0.9% rise in CO2 emissions. Furthermore, the coefficient of renewable energy use is negative and significant, which indicates that increasing renewable energy use by 1% is associated with CO2 emissions reduction by 0.3% in the long run. In addition, increasing technological innovation lowers CO2 emissions, implying that a 1% increase in the number of patent applications is linked to a 0.05% reduction of CO2 emissions. The empirical findings reveal that increased renewable energy use and technological innovation can reduce Malaysia’s carbon emission while economic growth deteriorates the environmental quality. Thus, effective implementation of policy measures to a low-carbon economy, promoting renewable energy use, and financing technological innovation could help to achieve Malaysia’s Paris Agreement by reducing CO2 emissions.

Keywords: Climate change; CO2 emissions; Economic growth; Renewable energy; Technological innovation; Malaysia (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (16)

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DOI: 10.1007/s10669-022-09848-0

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