Do technology and structural changes favour environment in Malaysia: an ARDL-based evidence for environmental Kuznets cu
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Do technology and structural changes favour environment in Malaysia: an ARDL‑based evidence for environmental Kuznets curve Wajahat Ali1 · Rahman Inam Ur1 · Muhammad Zahid2 · Muhammad Anees Khan3 · Tafazal Kumail4 Received: 1 April 2019 / Accepted: 6 December 2019 © Springer Nature B.V. 2019
Abstract The current study is an effort to investigate the relationship between technological innovation, structural changes, and carbon dioxide emission ( CO2) along with the energy use and economic growth in the context of environmental Kuznets curve (EKC) over a period from 1985 to 2016. The study adopted the Zivot Andrews unit root test to check for the level of stationarity of the study variables. Based on the stationarity level, the study adopted autoregressive distributed lag (ARDL) approach to cointegration to investigate the presence of long- and short-run associations, simultaneously. To confirm the outcome of the ARDL bounds test in the presence of structural breaks, the study further applied the Gregory Hansen test of cointegration. The results reveal that industry value added in Malaysia has no significant impact on C O2 emissions. The results further posit that improvement in technology can lead to a cleaner environment. Regardless of improvements in technology and insignificant pressure of industrial activities towards environment, the results are not in the favour of the EKC hypothesis neither under the conventional turning point formula nor under the new turning point formula. The results reveal that long-run C O2 emission is bidirectionally related to energy use, structural changes, and technological innovation. The short-run results indicate bidirectional causalities between energy consumption, structural change, and C O2 emissions. The study suggests that the government should overhaul the structure of the energy in Malaysia to overcome both the losses in the production process and to reduce carbon emissions by inspiring the induction of environment-friendly and efficient technologies in the production process and a shift towards more services sector economy. The outcomes of the study are according to the theory of ecological modernization. Keywords CO2 emissions · EKC · Technological innovation · Structural change JEL Classification Q56 · Q59 · Q55 · L16
* Wajahat Ali [email protected] Extended author information available on the last page of the article
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1 Introduction Economies around the world are striving to achieve their utmost goal of the higher and sustainable economic growth via the accumulation and utilization of natural resources; therefore, they consider the problem of climate change as the ultimate hurdle in the path of economic development. However, the higher growth through increasing production activities may cause the climatic hazards, which is not good for sustainable development goals (de Jesus and de Jesus 2013). Malaysia, being a transitional economy, with the objective to become a developed nation, practices the export-oriented po
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