Experimenting the Long-Haul Association between Components of Consuming Renewable Energy: ARDL Method with Special Reference to Malaysia

Global warming is a standout amongst the present most critical environmental issues, caused generally by emission of greenhouse gases, for example, carbon dioxide from the consuming of fossil fuels. Emissions of carbon dioxide fluctuate all through nations in Asia. It is progressively perceived that nations must act to advance the more prominent utilization of renewable energy resources as a component of activities looking to relieve environmental change. This paper shows a survey of the energy request situation in Malaysia and Indonesia. In this renewable energy, resources are getting to be attractive for sustainable energy development in Malaysia. It is essential for Malaysia to build the consumption of renewable energy to lessen its reliance on dirty fossil fuels for electricity generation. This paper endeavours to examine the elements influencing renewable electricity consumption (REC) in Malaysia. In particular, our examination means to investigate the long-haul relationship among REC, economic growth, CO2 emanations, foreign direct investment (FDI) and exchange transparency over the period from 1980 to 2015. By utilizing autoregressive distributed lag (ARDL) bounds testing cointegration approach, we locate that financial development and FDI are the real drivers for REC. Exchange transparency, be that as it may, is found to have a negative effect on REC over the long haul. Strangely, the impact of CO2 outflows on REC isn’t critical. In addition, the vector error correction model (VECM) Granger causality test finds the presence of a unidirectional causality relationship running from GDP to REC, affirming the legitimacy of conservation hypothesis in Malaysia. Some significant policy suggestions are likewise talked about. It is accordingly prescribed that the policymakers are required to concentrate on the green energy generation part by expanding renewable energy creation from the current sources.


INTRODUCTION
Energy is required in nearly our day-by-day life including agriculture, transportation, media transmission and mechanical exercises that affect the economic development. The economic development is measure by total national output (GDP) and in Malaysia, GDP is connecting precisely with the energy consumption of the nation (Rabie, 2018). The development in the economy in Malaysia is dependent on a continuous supply of energy.
As per the estimation of international Energy Agency, 53% worldwide energy consumption will be expanded by 2030, with 70% of the growth popular originating from creating nations (Oh et al., 2010). Malaysia is a standout amongst the most creating nations among ASEAN nations by Singapore, with GDP of US$15,400 per capita (PPP premise), and enduring GDP growth of 4. 6% in 20096% in (IMF, 2010. Malaysian economy grew at 5% in 2005 and in general, energy request is required to increment at a normal rate of 6% per annum (Saidur et al., 2009). In parallel with Malaysia's quick economic development, last energy consumption grew at This Journal is licensed under a Creative Commons Attribution 4.0 International License rate of 5.6% from 2000 to 2005 and achieved 38.9 Mtoe in 2005. The last energy consumption is relied upon to achieve 98.7, almost three times the 2002 dimension. The mechanical sector will have the highest growth rate of 4.3%. Modern sector represented some 48% of all out-energy use in 2007, which speaks to the highest.
Renewable energy will be energy produced from natural resources, for example, sunlight, wind, rain, tides and geothermal heat. Renewable energy will be energy that is produced from natural procedures that are persistently recharged (Promsri, 2018). Elective energy is a term utilized for an energy source that is an option in contrast to utilizing fossil fuels.

Renewable Energy in Malaysia
The Government received the four-fuel strategy, supplementing the national exhaustion policy, went for guaranteeing reliability and security of supply. The exhaustion of fossil fuels will expect Malaysia to utilize more sources of renewable energy for the supportability of its development. The National Biofuel Policy energizes the utilization of biofuels in accordance with the country's Five-Fuel Diversification Policy. The principle target of National Biofuel Policy is to decrease the relying upon fossil fuel that related with environmental issue, for example, the greenhouse gas discharge. On April 2009, Malaysia formulated the National Green Technology Policy to mirror that Malaysia's earnestness in driving the message that 'perfect and green' is the route forward towards making an economy that depends on feasible arrangements. It will likewise be the reason for all Malaysians to appreciate an improved personal satisfaction (Pineda and Maderazo 2018). The government needs to elevate green technology utilization to push for economic growth in the new economic model.

Consuming Renewable Energy in Malaysia
Renewable energies incorporate wind, sun powered, biomass and geothermal energy sources. This implies all energy sources that recharge themselves inside a brief timeframe or are for all time accessible. Energy from hydropower is just somewhat a renewable energy. This is positively the situation with river or tidal power plants. Something else, various dams or repositories additionally produce blended forms, for example by siphoning water into their repositories around evening time and recouping energy from them amid the day when there is an expanded interest for electricity. Since it is preposterous to obviously decide the measure of produced energy, all energies from hydropower are shown independently.
The primary indigenous renewable sources in Malaysia incorporate; palm oil biomass wastage, "hydropower, sun powered power, strong waste and landfill gas, wind energy. Among these resources, hydropower is reasonable for both little and extensive scale applications, sun-based photograph voltaic power is  (Malek et al., 2010). Furthermore, Malaysia's local oil generation happens seaward, essentially close to the Peninsular Malaysia. Toward the finish of 2015, Malaysia's raw petroleum save, including condensate, was 5.5 billion barrels of proportionate. Malaysia likewise has a rich natural gas hold. Figures 1 and 2 shows the renewable sources in Malaysia. Toward the finish of 2015, Malaysia's demonstrated natural gas holds were 14.66 billion barrels of comparable. Malaysia's hydropower potential is surveyed at 29 000 megawatts; 85% of potential destinations are situated in East Malaysia. Biomass resources are for the most part from palm oil, wood and agro-industries." In 2015, renewable energies accounted for around 5.2% of actual total consumption in Malaysia. The following chart shows the percentage share from 1990 to 2015:

LITERATURE REVIEW
Malaysia presented renewable energy as the fifth fuel strategy in the energy-blend under the National Energy Policy in 2001. An objective was set at 500 MW matrix associated power generations by 2005 from renewable energy sources. Abd (Abd Halim, 2012) the little renewable energy power program (SREP) was propelled in the meantime with monetary impetuses to support this activity. Malaysia has colossal potential renewable energy resources as biomass, sunlight based and hydro. Nevertheless, the implementation of SREP was not up to desire because of a few hindrances and difficulties looked by the experts and engineers, and the objective was updated in 2006 to 350 MW by 2010. At the COP15 in Copenhagen, Malaysia swore a wilful decrease of up to 40% regarding emissions force of GDP continuously 2020 contrasted with 2005 dimensions. With this dedication, the Renewable Energy Act was ordered in 2011 with the arrangement of Feed-in Tariff, giving progressively appealing motivating forces to goad the implementation of framework associated power generation from renewable energy resources. With the new RE Act 2010, the objective is modified to 985 MW by 2015 This paper depicts the development of renewable energy policy structure, techniques and initiatives for renewable energy implementation in Malaysia, with an end goal to diminish carbon emissions as vowed at the COP15. This paper additionally gives instances of renewable power generation at present executed and the on-going research and development exercises to improve the exploitation of renewable energy resources in Malaysia (Rahman and Zhang, 2017).
Malaysia has a decent blend of energy resources like oil, natural gas, coal and renewable energies, for example, biomass, and sun powered and hydro. Disregarding this many resource, the nation is dependent on fossil fuel for modern and transportation sector. (Andriyana, 2011) In 2009.5% of electricity is created by utilizing fossil fuel, for example, natural gas, coal, diesel oil and fuel oil. As of not long ago, Malaysia stills a net energy exporter. Worries about energy security, the vacillation of raw petroleum cost and environmental change are driving significant changes in how energy and electricity explicitly, is created, transmitted and consumed in Malaysia. In such manner, renewable energy resources are getting to be alluring for supportable energy development in Malaysia. There is because renewable sources of energy are abundant in Malaysia, the significant ones being biomass and sunlight based (Rahman, 2017). This article displays an audit of present energy circumstance and energy policies for the energy sector in Malaysia. Examination of different renewable energy and inspect the energy and environmental issues related with this energy. The audit of current utilization of renewable energy sources and furthermore its potential implementation is assessed to give answer for the national. Figure 3 shows the renewable electricity consumption in Malaysia.  and connected panel vector error rectification model to think about research the relationship in nineteen rising economies. The findings of the investigation establish that renewable energy is generous to diminish carbon emanation in long run. The findings of the examination anyway neglected to discover significance of renewable in affecting carbon outflow in short run.
The similar studies of Azlina and Mustapha (2012) also studied the likewise association in Malaysia. The aftereffects of these examinations uncovered the reliance of renewables on environmental corruption and recommend the unit-directional connection between the variable expressing that an increase in renewable is probably going to decline environmental deterioration as carbon emission.

Sources of Data Collection
The investigation utilizes annual time series information for the period from 1980 to 2015 in Malaysia. The information is gotten from International Energy Statistics, World Development Indicators (WDI) and Emissions Database for Global Atmospheric Research (EDGAR).

Variables used in this study
The needy variable in the model alludes to renewable electricity consumption (REC) which is estimated utilizing renewable electricity net consumption in billion kWh. In the interim, the explanatory factors included are economic growth, carbon dioxide (CO 2 ) emissions, exchange transparency, FDI which are signified by GDP per capita (US$), CO 2 emissions in metric tons per capita, offer of import and fare in GDP, proportion of foreign investment to GDP individually. To decrease the variety and prompt stationarity in the variance covariance matrix, the common logarithmic form (ln) is connected to every one of the factors.

Procedure
The examination is begun by deciding the order of integration of the factors utilizing unit root test. Augmented Dickey Fuller (ADF) is a standout amongst the best-realized unit root tests dependent on the model of the main request autoregressive procedure (Box and Jenkins, 1970). Also, Phillips and Perron (PP) test takes into account milder suspicions on the error distribution and controls for higher request sequential relationship in the series just as heteroscedasticity. In the wake of choosing the request of integration, the presence of long-run connection between the factors is tested. The autoregressive distributed lag (ARDL) strategy is proposed because of its compelling applications for little example sizes contrasted with Johansen (1988) and Engle and Granger (1987) tests. ARDL is additionally material independent of the factors are coordinated of request zero or one or commonly cointegrated as long as not structure two. Additionally, Banerjee et al. (1998) guaranteed that ARDL does not change over the short run coefficients into residuals. Fundamentally, ARDL strategy includes the estimation of unlimited error change model (UECM) in first contrast form, augmented with one period lagged of all factors in the model. The UECM model is appeared as pursues: Where REC is REC, GDP is economic development, CO 2 is carbon dioxide emissions, TRADE will be exchange transparency and FDI is foreign direct investment, ∆ is the main distinction administrator and is error term individually. The ideal lag length is chosen dependent on Akaike's Information Criterion (AIC). The F-statistics got from Wald tests is utilized to decide the joint significance of the coefficients of the lagged dimension of the factors. The null hypothesis of no cointegration is set up as: 1 + 2 + 3 + 4 + 5 = 0. The upper bound critical value (UCB) accept that all the regressors are I (1) while I (0) for lower bound critical value (LCB). Given that the sample size of this investigation is moderately little (T=36), the rejection of null hypothesis alludes to the critical value re-enacted by Narayan (2005). It was demonstrated that the cointegration existed between the factors if F-statistics is more noteworthy than UCB. Something else, the null hypothesis can't be rejected if F-statistics is lower than LCB which shows that the factors are not cointegrated. As indicated by Bardsen (1989), the long-run coefficients are evaluated utilizing the proportion of coefficients of every independent variable to dependent variable's coefficient individually.
This is trailed by Granger causality test to examine the causal connection between the factors in short run. On the off chance that the factors are not cointegrated, the vector autoregressive (VAR) in first contrast form is utilized. Interestingly, if the cointegration is found between the factors, the examination appraises the heading of causality utilizing vector error rectification models (VECM).
Where ∆ is the primary distinction operator, k is the optimal lag order dependent on AIC and 1 is error term.   Table 2 displays the consequences of the ADF and PP unit pull tests for the five factors both at level and first contrast of the natural log values. Strangely, every one of the factors in ADF test is non-stationarity at level aside from FDI. The factors transform into stationary when they are first differenced at 1% significance dimension while exchange is the main variable noteworthy at 5% level. In addition, PP test produces results like ADF test. Just FDI accomplishes stationarity at level while different factors, for example, REC, GDP, CO 2 emissions and exchange become stationary at first contrast with 5% significance dimension. As every one of the factors are found to have the order of I (0) and I (1), we utilize ARDL bound test so as to decide the long-run cointegration between GDP, CO 2 emissions, exchange and FDI with REC in Malaysia. Moreover, it is likewise relevant in VECM Granger causality with the integration of I (0) and I (1) (Sinha and Sinha, 1998). Table 3 displays the consequences of the bounds test dependent on REC and its determinants. The ARDL (1, 4, 0, 2, 3) model is chosen to fit the information of value included per capita inservice sector. The optimal lag chose is one dependent on AIC tests. The processed F-statistic of 13.591 in ARDL bound test is more prominent than the upper critical bound value of 6.250 at 1% significance dimension dependent. The rejection of null hypothesis of no cointegration proposes that the presence of consistent state long-run relationship among GDP, CO 2 emissions, exchange, FDI and REC in Malaysia. This is in accordance with the examinations led by Sadorsky (2009) and Sebri and Ben-Salha (2014) who uncover a long-run relationship among the factors.

ARDL bound test
The Breusch-Godfrey serial correlation LM test shows that the model is free from serial correlation issue. There is no heteroskedasticity issue found from ARCH test. Table 4 shows the aftereffects of long-run flexibilities of explanatory variables on REC. Strikingly, all the explanatory variables are observed to be huge in clarifying the REC over the long haul for Malaysia aside from CO 2 emissions. It is apparent that GDP has a positive and noteworthy coefficient all through the long keep running at 10% significance level, showing that 1% expansion of GDP would build the REC by 1.189%. The assessed income flexibility of REC or request is decidedly more noteworthy than 1, showing that it tends to be considered as a predominant decent in Malaysia. The outcome is inside our desire as higher economic development would enable the economy to have more assets to advance the utilization of greener energy sources that incorporate renewable electricity. Meanwhile, better economic performance empowers individuals in the nation to have more salary to be spent on natural insurance and to request a greater amount of renewable energy. The positive effect of    GDP on REC is confirmed by past examinations, for example, Marques and Fuinhas (2011). Moreover, the finding further infers the significance of economic development in boosting REC by expanding its capacity to create technologies identified with renewable electricity in Malaysia.
Extra rate increment in FDI likewise altogether raises REC by 0.299%. This recommends mechanical exchange through FDI has effectively upgraded the consumption of renewable electricity. Our finding concurs with the prevalent view that FDI is basic in improving REC.
Trade openness is observed to be contrarily identified with REC over the long haul. The REC is lessened by 1.352% with one percent expansion in trade openness. The outcome demonstrates that foreign trade can't energize the exchange of renewable advancements in electricity generation by means of mechanical exchange. As it were, it doesn't advance the consumption of renewable electricity in Malaysia. Be that as it may, it negates with ends archived in writing, for example, Ben Jebli and Ben Youssef (2015) and Omri and Nguyen (2014) who guarantee that trade openness prompts an expansion in the utilization of renewable energy.
Then again, our outcomes demonstrate that CO 2 emissions don't significantly affect REC. The value of the coefficient is sure however not critical. This demonstrates our finding isn't in accordance with past examination. The positive connection between CO 2 emissions and REC, in any case, is steady and guarantee that an ascent in CO 2 emissions is the real driver for REC. On account of Malaysia, a positive yet immaterial connection between the two variables can be clarified by the way that public awareness on the significance of using renewable electricity is as yet weak among Malaysians.

VECM granger causality test
The consequences of Granger causality as appeared Table 5 demonstrates that GDP does Granger-cause REC in a unidirectional manner at 10% significance level. This outcome affirms the significance of economic development of Malaysia in advancing REC. Like findings acquired Kula (2014), a unidirectional causality is likewise found from GDP to REC. Be that as it may, our finding contrasts from concentrates by Farhani and Shahbaz (2014) and Al-mulali et al. (2014) who found no causality and a bidirectional connection between economic development and REC individually.
Likewise, a unidirectional causal relationship is found from trade openness to CO 2 emissions at 1% significance dimension showing that trade progression contributes to the disintegration of environmental quality in Malaysia. It is predictable with the findings of Kasman and Duman (2015) who additionally find a unidirectional causality from trade openness to CO 2 emissions on account of new EU part nations. Our outcome, in any case, is conflicting with the finding by Ohlan (2015) who proposes that there is no causality between the two variables. Table 6 demonstrates the aftereffects of variance decomposition analysis (VDC) that different the variety for each endogenous variable into the part shocks to the VECM. The VDC of REC obviously shows that TRADE and GDP are crucially disclosing the advancement to REC (Hussain et al., 2019). The shocks to REC in light of a one standard deviation development in TRADE and GDP exceptionally extend from 0% to 20.96% and 20.93% individually (Johari et al., 2018). Like the findings of ARDL and IRF, these VDC findings affirm the dynamic impact of shocks from TRADE and GDP towards REC (Saudi et al., 2019). This suggests the development and development of Malaysian economy is critical to improve the consumption of renewable electricity. Then again, the shocks of CO 2 ( 8.77%) and FDI (6.46%) are found to contribute the minor impact on the shocks of REC in the discrete time frames.

Variance decomposition analysis
In addition, the VDC of GDP demonstrates the most critical shocks impact of CO2 emissions (12.53%) towards the shocks of GDP contrasted with REC (11.15%), TRADE (4.02%) and FDI (0.15%) separately. Moreover, the VDC of CO 2 finds that the shocks impact of TRADE exceedingly reacts to one standard deviation development in CO 2 emissions. This is in accordance with the findings of VECM Granger causality that TRADE granger causes CO 2 emissions. In the interim, one standard deviation shock in GDP clarifies CO 2 emissions by 27.25%. The presence of modified U-shaped relationship among GDP and CO 2 emissions in Malaysia is demonstrated as GDP increments at the underlying stage and starts to decrease in the wake of achieving the pinnacle point. The commitments of REC, GDP, CO 2 and FDI to TRADE are added up to 18.65%, 4.88%, 5.50% and 4.62% individually. Moreover, the changes of FDI are clarified by one standard deviation shock in REC, GDP, CO 2 and TRADE with the level of 1.73%, 32.82%, 14.66% and 11.87% separately.

CONCLUSION
This present paper researches the job of renewable energy consumption in affecting economic prosperity of Malaysia by utilizing the annual information over the time from 1980 to 2015. Malaysia has substantial resources of RE as biomass, hydro and sunlight-based energy. The National Energy Policy and procedures are as of now set up for the significant commitment of RE in the electricity generation mix. Distinguishing the determinants for REC is significant for Malaysia to configuration proper arrangements and systems that can battle ecological issues. In this examination, we investigate the drivers and hindrances to the consumption of renewable electricity in Malaysia utilizing annual information Results got from ARDL bounds testing cointegration approach uncover that economic development and FDI are the fundamental drivers for REC in Malaysia. This infers REC could be additionally improved through an expansion in GDP and FDI. Then again, trade openness is found to negatively affect REC over the long haul, demonstrating that exchanges of merchandise and ventures among nations will in general ruin the consumption of renewable electricity. It is discovered that CO 2 emissions irrelevantly influence REC. Moreover, a unidirectional causality relationship is discovered running from GDP to REC, proposing that conservation hypothesis is legitimate for Malaysia. It is likewise affirmed that a unidirectional Granger causality is running from trade openness to CO 2 emissions, however not the other way around. We find that FDI positively affects REC. This outcome is characteristic of the way that FDI can be used as an instrument to advance the utilization of renewables. While pulling in more FDI, the Malaysian government needs to guarantee that just those foreign investors who create and receive renewable energy are welcome to the nation.