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Does oil price shocks mitigate sectoral CO2 emission in Malaysia? evidence from ARDL estimations


Maji, Ibrahim Kabiru and Habibullah, Muzafar Shah and Saari, Mohd Yusof (2020) Does oil price shocks mitigate sectoral CO2 emission in Malaysia? evidence from ARDL estimations. Kasetsart Journal of Social Sciences, 41 (3). 633 - 640. ISSN 2452-3151


This study provides new evidence regarding the effects of oil price shocks on sectoral environmental indicators. We used annual time series data for the period 1983–2014 and employed the autoregressive distributed lag (ARDL) modelling approach to estimate the long-run impact of oil price shocks on sectoral CO2 emissions. We found a negative relationship between oil price shocks and CO2 emissions in all sectors; namely, manufacturing and construction, agriculture, transportation, and the oil and gas sectors. This suggests that higher oil price can mitigate sectoral CO2 emissions while lower oil price can increase sectoral CO2 emissions. Generally, income exerts a positive impact on sectoral CO2 emissions, implying that an increase in the level of income invokes sectoral CO2 emissions. However, the level of capital and labour were found to mitigate sectoral CO2 emissions in Malaysia. Thus, we recommend contractionary fiscal measures on oil-related products during lower oil prices.

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Additional Metadata

Item Type: Article
Divisions: Institute of Tropical Agriculture and Food Security
School of Business and Economics
DOI Number: https://doi.org/10.34044/j.kjss.2020.41.3.28
Publisher: Kasetsart University Research and Development Institute
Keywords: ARDL; CO2 emissions; Malaysia; Oil price shocks; Sectoral analysis
Depositing User: Ms. Nuraida Ibrahim
Date Deposited: 22 Dec 2021 02:28
Last Modified: 22 Dec 2021 02:28
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.34044/j.kjss.2020.41.3.28
URI: http://psasir.upm.edu.my/id/eprint/88517
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