Asymmetric effects of governance quality and economic sustainability on carbon dioxide emissions in Malaysia from 1990 to 2024

This study examines the asymmetric effects of governance quality, inclusive development, renewable energy, and economic sustainability on carbon in Malaysia from 1990 to 2024 using a nonlinear autoregressive distributed lag (NARDL) model. The results reveal significant asymmetric relationships between governance quality, inclusive development, economic sustainability, and carbon intensity. Positive changes in governance quality significantly reduce carbon intensity in the long run, indicating that improved governance contributes to better environmental performance. In contrast, negative governance shocks are associated with higher carbon intensity. Positive changes in inclusive development have no statistically significant long-run effect, while negative changes significantly increase carbon intensity. Economic sustainability shows an asymmetrical relationship with carbon intensity: increases in economic sustainability lead to substantial rises in carbon intensity, whereas falls in economic sustainability are associated with falls in carbon intensity. Renewable energy consumption considerably reduces carbon intensity in both the short and long term, while economic growth drives up carbon intensity in the long run. The authors underline the need to strengthen governance institutions, facilitate inclusive development, and accelerate the transition to renewable energy to reduce carbon intensity and improve the country’s environmental performance.