The role of natural resource rent, economic sustainability, and renewable energy consumption on greenhouse gas emissions: an asymmetric analysis

Abstract

In the last twenty years, the extraction and utilisation of resources have markedly increased, resulting in environmental problems such as resource depletion, smog, and climate change. As industrialization continues to grow, research increasingly focuses on the relationship between natural resource depletion and CO₂ emissions. So, this study aims to find out how natural resource rent (NRT), economic sustainability (ES), and renewable energy consumption (REC) affect Malaysia’s total greenhouse gas emissions (TGS) from 1990 to 2022. The nonlinear autoregressive distributed lag (NARDL) method was employed. We collected a total of 32 years of data from the World Bank based on availability. Based on the results, TGS will eventually benefit significantly from the increase in oil and mineral rent. But in the short run, a negative change in oil rent has significant positive effects, and a positive change in mineral rent has significant negative effects on total greenhouse gas emissions. There is also a positive change in natural gas, and coral rent has significant negative effects on TGS emissions in the long run. However, a negative change in oil rent has a significant negative impact on TGS emissions. It also found that consumption of renewable energy has a negative correlation with TGS emissions and economic sustainability has a positive relationship with TGS emissions. Malaysia should transition to renewable energy to mitigate GHG emissions by incentivising investments, diminishing fossil fuel subsidies, and implementing more stringent natural resource restrictions. Strengthened enforcement of environmental regulations, investment in cleaner technologies, and public knowledge of sustainability are essential.