Investigation of The Driving Factors of Ecological Footprint in Malaysia

Abstract Malaysia’s growing trends in energy production related emissions throw doubt on the country's possibility of meeting the Paris Climate Change Agreement and SDG obligations. Taking into account Malaysia’s current growth pattern and climatic circumstances, this study evaluates the association between ecological footprint and its potential determinants: economic growth, oil consumption, renewable energy and domestic capital investment for the period between 1965 and 2017. The stationary nature of the parameters is investigated using the conventional unit root approach (ADF and PP unit root) and structural break unit root (ZA unit root). The bounds approach in combination with the critical approximation p-values of Kripfganz and Schneider (2018) established a cointegration association between the observed parameters. The ARDL approach uncovered that economic growth and oil consumption contribute to ecological footprint. Furthermore, renewable energy consumption and gross capital formation reduce the ecological footprint. The FMOLS and DOLS estimators were applied as the sensitivity analysis of the ARDL estimators. Furthermore, the spectral BC causality approach was also utilized to investigate the causal association between ecological footprint and its determinants.