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Environmental Science and Pollution Research

, Volume 22, Issue 24, pp 19773–19785 | Cite as

Causal nexus between energy consumption and carbon dioxide emission for Malaysia using maximum entropy bootstrap approach

  • Sehrish Gul
  • Xiang Zou
  • Che Hashim Hassan
  • Muhammad Azam
  • Khalid ZamanEmail author
Research Article

Abstract

This study investigates the relationship between energy consumption and carbon dioxide emission in the causal framework, as the direction of causality remains has a significant policy implication for developed and developing countries. The study employed maximum entropy bootstrap (Meboot) approach to examine the causal nexus between energy consumption and carbon dioxide emission using bivariate as well as multivariate framework for Malaysia, over a period of 1975–2013. This is a unified approach without requiring the use of conventional techniques based on asymptotical theory such as testing for possible unit root and cointegration. In addition, it can be applied in the presence of non-stationary of any type including structural breaks without any type of data transformation to achieve stationary. Thus, it provides more reliable and robust inferences which are insensitive to time span as well as lag length used. The empirical results show that there is a unidirectional causality running from energy consumption to carbon emission both in the bivariate model and multivariate framework, while controlling for broad money supply and population density. The results indicate that Malaysia is an energy-dependent country and hence energy is stimulus to carbon emissions.

Keywords

Carbon dioxide emission Energy consumption Maximum entropy bootstrap approach Malaysia 

Jel Classification

Code: Q43 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • Sehrish Gul
    • 1
  • Xiang Zou
    • 2
  • Che Hashim Hassan
    • 3
  • Muhammad Azam
    • 4
  • Khalid Zaman
    • 5
    Email author
  1. 1.Department of Management SciencesCOMSATS Institute of Information TechnologyAbbottabadPakistan
  2. 2.Institute of Graduate StudiesUniversity of MalayaKuala LumpurMalaysia
  3. 3.Unit for the Enhancement of Academic PerformanceUniversity of MalayaKuala LumpurMalaysia
  4. 4.School of Economics, Finance and Banking College of BusinessUniversity Utara MalaysiaSintokMalaysia
  5. 5.Department of EconomicsUniversity of SargodhaLahorePakistan

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