The effects of total factor of productivity, natural resources and green taxation on CO2 emissions in Malaysia.

Abstract

This study attempts to investigate the environment cleanness between the total factor productivity, natural resources and green taxation on Malaysia's clean environment. Using the environmental Kuznets curve (EKC) hypothesis, this study employs the bootstrap quantile estimates based on the annual data series covering the period of 1970-2018 to analyse the quantile effect factors affecting environment cleanness in Malaysia. The empirical estimates of this study reject the EKC hypothesis throughout the quantile levels, while the green taxation shows a negative sign which indicated government fiscal policies are reducing carbon emission in the upper quantiles. There is also homogeneity slope equality effect between total factor of productivity and green taxation on carbon emissions in the middle and upper quantile levels, while natural resources are indication heterogeneity effect on all quantile levels. From the policy point of view, if Malaysia wants to get environment cleanness, there is a need for comprehensive policies of total factor of productivity with environment innovation-friendly and technological improvement in all major economic sectors of the country.