Sectoral Energy-CO2 Emissions Using an Environmental Input-Output Framework

Abstract

Global climate change is an alarming problem nowadays. Weather temperatures have been uncertain because of what many scientists claim is the effect of greenhouse gases, contributed mainly by the energy industry. In Malaysia, the energy industry provides a significant contribution to it economy making up about 20 percent of the GDP. Malaysia is the third largest natural gas exporter in the Asia-Pacific region in 2011 and eleventh in the world (British Petroleum Statistical Review of World Energy, 2014). Malaysia's CO2 emission recorded at 185 million tonnes in 2010 (International Energy Agency, 2012). Mohd Safaai et al. (2011) projected that without any mitigation measures 285.73 million tonnes of CO2 will be released in 2020. In the Copenhagen forum 2009, Malaysia has pledged to reduce 40% of carbon emissions by 2020 compared to the 2005 levels. Motivated by the government efforts, this study will construct environmentally extended input-output framework for Malaysia to obtain the energy-related CO2 emission intensities by sectors. The study is responded to the inadequate of reliable data on Malaysia’s sectoral CO2 emissions and to the growing awareness of the effectiveness of Malaysia climate change policies. This study expanding the current understanding of interactions among economic activities, energy intensities, and CO2 emissions. Results of this study found that Transportation recorded the second highest contributor to CO2 emission, and these findings were different to many other existing studies that found transportation sector as a main contributor to CO2 emission. In addition, results suggest that it is necessary to control environmental problems and encourage the energy use efficiency in the production process, particularly in the Building and construction sector, Transportation, Electricity, gas and water and Agriculture sector in Malaysia The findings will help the policy-makers particularly in Malaysia to develop a strategic plan and tools to manage CO2 emission with respect to climate change in these four sectors.

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