The Impact of Gross Domestic Product, Trade Openness, Air Transportation, and Total Final Energy on Carbon Dioxide Emission in Malaysia

Abstract

The current paper provides an empirical analysis of the relationship between carbon dioxide
(CO2) emissions and economic factors, namely Gross Domestic Product (GDP), air
transportation, energy consumption, and trade openness in Malaysia, based on the annual data
from 1990 until 2016. By utilising the cointegration analysis, it is demonstrated that CO2
emissions exhibit a positive and significant long-run relationship with air transportation and
energy consumption. Meanwhile, GDP and trade openness are significant in influencing CO2
emissions in the short run. It was also demonstrated that the disturbances fluctuate while
entering the long-run relationship in a dampening manner rather than monotonically. It is
advised for policymakers to continually consider the movements of these economic
determinants due to their significant effect on CO2 emissions in Malaysia in both the short and
long run.