Decarbonizing Growth: The Role of Human Capital Development and Innovation in Malaysia's Pursuit of SDG 13

Wong Sing Yun (), Abdul Rahim Ridzuan (), Ahmad Al Izham Izadin (), Adamu Ahmed Wudil (), Zhang Ruiqi () and Teo Sue Ann ()
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Wong Sing Yun: Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia
Abdul Rahim Ridzuan: Institute for Big Data Analytics and Artificial Intelligence, Universiti Teknologi MARA, Malaysia; & Faculty of Business and Management, Universiti Teknologi MARA, Puncak Alam Campus, Selangor, Malaysia; & Accounting Research Institute, University Teknologi MARA, Malaysia; & Centre for Economic Development and Policy, Universiti Malaysia Sabah, Malaysia
Ahmad Al Izham Izadin: Institute of Research in Finance and Analytics (IRFAN), Malaysia
Adamu Ahmed Wudil: Centre for the Study of the Economies of Africa, Abuja, Nigeria
Zhang Ruiqi: School of Jilin Institute of Chemical Technology, Jilin, China
Teo Sue Ann: Policy Advocacy Unit, All-Party Parliamentary Group Malaysia on Sustainable Development Goals, Malaysia

International Journal of Energy Economics and Policy, 2025, vol. 15, issue 6, 18-27

Abstract: This study investigates the impact of human capital development and technological innovation on environmental sustainability in Malaysia, as part of the Malaysian commitment to Sustainable Development Goal 13 (Climate Action). Using Autoregressive Distributed Lag (ARDL) model and time series data covering the period 1990-2022, the analysis explores the dynamic relationship between CO2 emissions and major macroeconomic variables, namely economic growth, energy consumption, technological innovation, trade openness, foreign direct investment (FDI), quality of governance, education, and GINI coefficient. The empirical findings reveals that technological innovation and human capital development significantly contribute to long-run decline in CO2 emission, hence emphasis their role in ensuring a sustainable low-carbon economy. On the other hand, FDI correlates with higher emissions, which gives relevance to pollution haven hypothesis in the Malaysian case. The study emphasis the need to invest in green technology, incorporate sustainability in the education system and tightening environmental standards in the foreign investments. Such policy steps are necessary to ensure that economic progress is no longer linked to environmental degradation and accelerate Malaysia's transition towards a climate-resilient future.

Keywords: Human Capital Development; Technological Innovation; Environmental Sustainability; CO2 Emissions; Sustainable Development Goals (SDG 13) (search for similar items in EconPapers)
Date: 2025
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DOI: 10.32479/ijeep.20530

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