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Energy subsidy reform and energy sustainability in Malaysia

The 12th Sustainable Development Goals (SDGs) highlighted the importance of ensuring sustainable consumption and production patterns. Researchers have found that energy subsidies may encourage overconsumption, misuse, and moral hazard problems. Hence, there is a need to rationalize inefficient ener...

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Main Authors:	Dzul Hadzwan, Husaini, Hooi Hooi, Lean, Puah, Chin Hong, Dyg Affizzah, Awang Marikan
Format:	Article
Language:	English
Published:	Elsevier B.V. 2023
Subjects:	HB Economic Theory
Online Access:	http://ir.unimas.my/id/eprint/41085/7/Energy%20subsidy.pdf http://ir.unimas.my/id/eprint/41085/ https://www.sciencedirect.com/science/article/abs/pii/S0313592622002211 https://doi.org/10.1016/j.eap.2022.12.013
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id	my.unimas.ir.41085
record_format	eprints
spelling	my.unimas.ir.410852023-01-11T07:11:19Z http://ir.unimas.my/id/eprint/41085/ Energy subsidy reform and energy sustainability in Malaysia Dzul Hadzwan, Husaini Hooi Hooi, Lean Puah, Chin Hong Dyg Affizzah, Awang Marikan HB Economic Theory The 12th Sustainable Development Goals (SDGs) highlighted the importance of ensuring sustainable consumption and production patterns. Researchers have found that energy subsidies may encourage overconsumption, misuse, and moral hazard problems. Hence, there is a need to rationalize inefficient energy subsidies. Consequently, the Malaysian government has been implementing a subsidy reformation program to improve energy efficiency and reduce fiscal burdens. This study aims to identify and compare the impacts of energy subsidies and oil prices on energy consumption across the agricultural, industrial and service sectors in Malaysia. It is critical for policymakers to better understand the role of energy subsidies in influencing energy consumption, especially the magnitude to which energy subsidies influence energy consumption, in order to structure a subsidy reform strategy which effectively addresses the energy overconsumption issue. In this study, a time series dataset covering the years of 1978 through 2018 is analyzed. The ARDL approach and Granger causality test were employed to determine meaningful statistical evidence and revealed four important findings. Firstly, energy subsidies have a positive relationship with energy consumption. Secondly, oil prices have a negative relationship with energy consumption and energy subsidies significantly interact with oil prices to affect energy consumption. This significant positive moderating effect suggests that energy subsidies may counteract the negative impact of oil prices on energy consumption. Thirdly, output has the greatest (positive) impact on energy consumption. And finally, energy subsidies drive higher outputs in the agricultural sector. Elsevier B.V. 2023 Article PeerReviewed text en http://ir.unimas.my/id/eprint/41085/7/Energy%20subsidy.pdf Dzul Hadzwan, Husaini and Hooi Hooi, Lean and Puah, Chin Hong and Dyg Affizzah, Awang Marikan (2023) Energy subsidy reform and energy sustainability in Malaysia. Economic Analysis and Policy, 77. pp. 913-927. ISSN 2204-2296 https://www.sciencedirect.com/science/article/abs/pii/S0313592622002211 https://doi.org/10.1016/j.eap.2022.12.013
institution	Universiti Malaysia Sarawak
building	Centre for Academic Information Services (CAIS)
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Malaysia Sarawak
content_source	UNIMAS Institutional Repository
url_provider	http://ir.unimas.my/
language	English
topic	HB Economic Theory
spellingShingle	HB Economic Theory Dzul Hadzwan, Husaini Hooi Hooi, Lean Puah, Chin Hong Dyg Affizzah, Awang Marikan Energy subsidy reform and energy sustainability in Malaysia
description	The 12th Sustainable Development Goals (SDGs) highlighted the importance of ensuring sustainable consumption and production patterns. Researchers have found that energy subsidies may encourage overconsumption, misuse, and moral hazard problems. Hence, there is a need to rationalize inefficient energy subsidies. Consequently, the Malaysian government has been implementing a subsidy reformation program to improve energy efficiency and reduce fiscal burdens. This study aims to identify and compare the impacts of energy subsidies and oil prices on energy consumption across the agricultural, industrial and service sectors in Malaysia. It is critical for policymakers to better understand the role of energy subsidies in influencing energy consumption, especially the magnitude to which energy subsidies influence energy consumption, in order to structure a subsidy reform strategy which effectively addresses the energy overconsumption issue. In this study, a time series dataset covering the years of 1978 through 2018 is analyzed. The ARDL approach and Granger causality test were employed to determine meaningful statistical evidence and revealed four important findings. Firstly, energy subsidies have a positive relationship with energy consumption. Secondly, oil prices have a negative relationship with energy consumption and energy subsidies significantly interact with oil prices to affect energy consumption. This significant positive moderating effect suggests that energy subsidies may counteract the negative impact of oil prices on energy consumption. Thirdly, output has the greatest (positive) impact on energy consumption. And finally, energy subsidies drive higher outputs in the agricultural sector.
format	Article
author	Dzul Hadzwan, Husaini Hooi Hooi, Lean Puah, Chin Hong Dyg Affizzah, Awang Marikan
author_facet	Dzul Hadzwan, Husaini Hooi Hooi, Lean Puah, Chin Hong Dyg Affizzah, Awang Marikan
author_sort	Dzul Hadzwan, Husaini
title	Energy subsidy reform and energy sustainability in Malaysia
title_short	Energy subsidy reform and energy sustainability in Malaysia
title_full	Energy subsidy reform and energy sustainability in Malaysia
title_fullStr	Energy subsidy reform and energy sustainability in Malaysia
title_full_unstemmed	Energy subsidy reform and energy sustainability in Malaysia
title_sort	energy subsidy reform and energy sustainability in malaysia
publisher	Elsevier B.V.
publishDate	2023
url	http://ir.unimas.my/id/eprint/41085/7/Energy%20subsidy.pdf http://ir.unimas.my/id/eprint/41085/ https://www.sciencedirect.com/science/article/abs/pii/S0313592622002211 https://doi.org/10.1016/j.eap.2022.12.013
_version_	1755876579862380544
score	13.211869

Energy subsidy reform and energy sustainability in Malaysia

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