Applying environmental Kuznets curve framework to assess the nexus of industry, globalization, and CO2 emission

Abstract Malaysia has continued to increase the explosive growth rate of its industries in recent years. The rise of globalization has driven Malaysia’s economic development at the ecosystem level of pollution. This research study explores the relationship of CO2 emissions, gross domestic product, globalization, industrialization, and trade openness for Malaysia by using annual data for 1971–2016. By applying the ARDL bound testing approach, the estimates infer that CO2 emissions have steadily risen with high economic growth and affirm the U-shaped environmental Kuznets curve (EKC). Globalization’ index and trade openness surge Malaysian CO2 emissions. While industrialization has a statistically significant negative impact on CO2 emissions. The VECM Granger causality infers the unidirectional causality running from economic growth, globalization, industrialization, and trade openness to CO2 emission in the short-run Finally, this study provides some suggestions to Malaysian policymakers for devising carbon emission reduction strategies.