SAGE Open (Jul 2022)

The Impact of Hydropower Energy in Malaysia Under the EKC Hypothesis: Evidence From Quantile ARDL Approach

  • Atif Jahanger,
  • Yang Yu,
  • Ashar Awan,
  • Muhammad Zubair Chishti,
  • Magdalena Radulescu,
  • Daniel Balsalobre-Lorente

DOI
https://doi.org/10.1177/21582440221109580
Journal volume & issue
Vol. 12

Abstract

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The present study investigates the impact of economic growth, hydropower generation, and urbanization on Malaysia’s CO 2 emissions. This study applies Quantile Autoregressive Lagged (QARDL) technique for the period of 1965Q1 to 2018Q4. The Granger-causality in quantiles is applied to confirm the causal nexus among the modeled variables. The outcomes demonstrate that hydropower generation decreases the detrimental effects of CO 2 emissions at the range of high quantile levels. Furthermore, urbanization, except for higher quantiles, exhibits negative impacts on CO 2 emissions. Also, the QARDL coefficients confirm the presence of the Environmental Kuznets Curve hypothesis from median to higher quantiles. Besides, the Granger-causality test confirms the two-way causality among CO 2 emissions and hydropower generation in Malaysia’s economy and the same for the other series. The policymakers should enhance the market attractiveness of hydropower generation projects through incentives for the investors.