Time Series Patterns and Relationship of Energy Consumption and CO 2 Emissions in Malaysia

Abstract

It is crucial to understand time series patterns of Malaysia’s energy consumption and CO₂ emissions and their relationship for implementing strategies and policies to energy security and climate change mitigation.Data from 1980 to 2011 show that all types of fuel and sectors exhibited growth in energy consumption. Major fuel energy consumed are the electricity, diesel, natural gas and motor petrol while transport and industrial sectors are the main consumers of energy. Alike, electricity generation and transport sectors contribute a larger share of CO₂ emissions followed by manufacturing industries and construction sectors among others. In recent years, emissions from power generation rapidly increased due to the increasing coal share of energy input instead of natural gas. Moreover, the positive and linear relationship between CO₂ emission and energy consumption indicates that Malaysia’s higher rate of energy consumption leads to the increased CO₂ emissions whereas a high growth of GDP and increasing population might cause increased energy consumption. However, implementation of Feed-in Tariff (FiT) mechanism would work as an incentive to reduce energy consumption and a motivation to consumers (individual or industry) to offset the incremental electricity cost by applying renewable energy and energy efficiency measures that ultimately would contribute to reduce emissions in Malaysia.