The Green Enigma: How Taxes, Technology and Growth Outline Carbon Emissions in Malaysia

Abstract

This study examines the repercussion of environmental taxes, technological innovation, and economic augmentation on carbon emanation in Malaysia during 1990–2021. The study applied a deductive research approach and used annual time-series data attained from secondary sources. Econometric analyses were carried out using EViews. To check the homogeneity of variables, the unit root test is employed, and to determine long-run relationship of variables, Johansen cointegration test is executed, after obtaining the relationship Vector Error Correction Model (VECM) to examine the long-run causality and short-run dynamic linkage. Empirical results prove that environment taxes play significantly and positively on carbon emission and it can significantly reduce carbon emissions. However economic growth and technological advancement had no significant and positively related on carbon emissions. Long-run relationship also proved by VECM test and the speed of convergence to long-run equilibrium was determined.