A Cointegration Analysis of Economic Growth and CO₂ Emissions: A Case Study of Malaysia.

The paper aims to establish a long-run and the Granger causal relationship between economic growth, emissions, international trade, energy consumption, and population density in Malaysia. The study will use annual data from 1970 to 2014. A unique cointegrating relationship between our variables was identified. The study employed the Auto-Regressive Distributed Lag model to examine the Environmental Kuznets Curve . Our empirical results analysis showed a long-run relationship between per capita emissions and our explanatory variables . To investigate the Granger causal relationship between , the Vector Error Correction Model was employed and our results, associated the absence of Granger causality between emissions and economic growth in the short-run while revealing a uni-directional Granger causality movement from economic growth to emissions in the long-run. Hence, an increase in will lead to a rise in emissions in Malaysia.