Green Transportation and Environmental Sustainability in Malaysia: Asymmetric Impacts of Air and Railway Passengers

Environmental degradation caused by carbon emissions poses a significant obstacle to sustainable development in many economies, particularly as they grow rapidly. In Malaysia, the transportation sector contributes significantly to total CO 2 emissions, with an increase in air passengers and a decline in rail passengers from 1995 to 2024, underscoring the need to develop sustainable transport strategies in the industry. This study investigates the asymmetric effects of air and rail passenger transport on CO 2 emissions using the Nonlinear Autoregressive Distributed Lag (NARDL) modeling approach. NARDL allows for both short‐run and long‐run nonlinear dynamic modeling, providing a more detailed account of how transport, economic growth, and urbanization influence environmental outcomes than traditional linear modeling procedures. The findings show that in both the short and long run, economic growth is a major contributor to CO 2 emissions, confirming that Malaysia's current development pattern is unsustainable. Linear models suggest that both air and rail passenger transport are negatively related to emissions (i.e. reflecting temporary improvements in fuel consumption/efficiency). Using NARDL, the results show an asymmetry in long‐run effects on air passenger transport: increasing the number of air passengers leads to higher emissions, whereas decreasing it leads to greater reductions in emissions. Conversely, there is only weak evidence of asymmetry in rail passenger transport: reductions lead to greater emissions than similar increases, but only in the short term. The study highlights that promoting railway transport and enhancing air travel efficiency can effectively reduce CO 2 emissions, providing evidence‐based guidance for sustainable transport policies in Malaysia.