Impacts of economic growth, energy use, population, urbanisation, and tourism on CO₂ emissions in Malaysia: an empirical analysis of ARDL approach

Increasing carbon dioxide (CO₂) emissions boost global warming, causing increasing extreme weather conditions, it is thus crucial to examine factors contributing to CO₂ emissions, climate mitigation, and net zero emissions. This paper aims to assess the dynamic impacts of CO₂ emissions determinants that are yet to be tested and validated by multiple econometric models. This includes an autoregressive distributed lag (ARDL) approach containing ARDL bounds, Johansen cointegration, and Engle-Granger cointegration tests, with a validation from dynamic ordinary least squares (DOLS), fully modified least squares (FMOLS), and canonical cointegrating regression (CCR) analysis. Results show that an increase of 1% in gross domestic product (GDP), amount of energy use, population size, number of people living in urban areas, and the number of tourists implies an increase in carbon emissions by 0.54%, 0.47%, 0.15%, 1.28%, and 0.42% respectively. The paired Granger causality test further concludes the existence of causal relationships, precisely, economic growth, energy use, and urbanisation demonstrate the strongest determinants of CO₂ emissions. The findings provide several practical implications to policy making in implementing effective strategies for energy policy reforms by incorporating rapid adoption of cleaner energy and green growth, boosting renewables in the Malaysian energy mix, stimulating public and private investments in low-emission technologies and infrastructures, implementing inclusive and sustainable urbanisation, promoting sustainable tourism, and integrating climate adaptation and mitigation measures into national policies. This study contributes valuable insights and recommendations for achieving Malaysia’s 45% emissions intensity reduction and becoming a net zero nation by 2050.