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Dynamic impact of household consumption on its CO2 emissions in Malaysia

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Abstract

This article aims to measure the dynamic impact of household consumption (final household consumption expenditure, LHC) on CO2 emission from household’s energy consumption in Malaysia from 1971 to 2010. The estimation of autoregressive distributed lag (ARDL) bounds test confirms a non-monotonic relationship between LHC and residential CO2 emission. In the long run, there is a positive relationship between LHC and CO2 emission as well as a negative relationship between quadratic forms of LHC and CO2 emission which indicates the existence of an inverted U-shaped relationship between these two variables. The analysis also found a similar relationship in both the short and long run. To confirm the non-monotonous relationship, the U test of Sasabuchi–Lind–Mehlum (2010) approach has followed to obtain the sufficient conditions for the existence of inverted U relationship. Moreover, the U test of Sasabuchi–Lind–Mehlum (2010) found that CO2 emission increases with increasing LHC up to 6.5 units, but it declines with an additional increase of LHC which is also found by the ARDL model. However, the existence of environmental Kuznets curve implies that in the long run, household CO2 emission declines with the additional increase of household consumption in the Malaysian economy.

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Acknowledgments

The authors are thankful for the research grants ‘Fundamental Research Grant Scheme (FRGS)’ under the Ministry of Education, Malaysia (Project Code: FRGS/1/2013/TK07/UKM/02/4) and ‘Research Development Fund/Dana Pembangunan Penyelidikan PTJ’ (DPP-2013-144).

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Authors and Affiliations

  1. Institute of Climate Change, Universiti Kebangsaan Malaysia (UKM), 43600, Bangi, Selangor, Malaysia

    Kazi Sohag, Rawshan Ara Begum & Sharifah Mastura Syed Abdullah

Authors
  1. Kazi Sohag
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  2. Rawshan Ara Begum
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  3. Sharifah Mastura Syed Abdullah
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Correspondence to Kazi Sohag.

Appendix: Data and sources

Appendix: Data and sources

Variable

Definition

Source

CO2 emissions from residential buildings and commercial and public services (million metric tons)

Carbon dioxide emissions, largely by-products of energy production and use, account for the largest share of greenhouse gases, which are associated with global warming. In 2010, the International Energy Agency (IEA) released data on carbon dioxide emissions by sector for the first time, allowing a more comprehensive understanding of each sector’s contribution to total emissions. The sectoral approach yields data on carbon dioxide emissions from fuel combustion [Intergovernmental Panel on Climate Change (IPCC) source/sink category 1A] as calculated using the IPCC tier 1 sectoral approach. Carbon emissions from residential buildings and commercial and public services are the sum of emissions from fuel combustion in households

IEA Statistics at OECD/IEA, http://www.iea.org/stats/index.asp)

Household final consumption expenditure per capita (constant 2005 US$)

Household final consumption expenditure per capita (private consumption per capita) is calculated using private consumption in constant 2005 prices and World Bank population estimates. Household final consumption expenditure is the market value of all goods and services, including durable products (such as cars, washing machines, and home computers), purchased by households. It excludes purchases of dwellings but includes imputed rent for owner-occupied dwellings. It also includes payments and fees to governments to obtain permits and licences

World Bank national accounts data

Electric power consumption (kWh per capita)

Electric power consumption measures the production of power plants and combined heat and power plants less transmission, distribution, and transformation losses and own use by heat and power plants

International Energy Agency (IEA Statistics© OECD/IEA, http://www.iea.org/stats/index.asp)

Dry natural gas consumption (billion cubic feet)

 

International Energy Agency (IEA Statistics© OECD/IEA, http://www.iea.org/stats/index.asp)

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Sohag, K., Begum, R.A. & Abdullah, S.M.S. Dynamic impact of household consumption on its CO2 emissions in Malaysia. Environ Dev Sustain 17, 1031–1043 (2015). https://doi.org/10.1007/s10668-014-9588-8

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