Citation

Bello, Mufutau Opeyemi and Solarin, Sakiru Adebola and Yuen, Yee Yen (2020) Interfuel substitution, hydroelectricity consumption and CO2 emissions mitigation in Malaysia: evidence from a transcendental logarithm (trans-log) cost function framework. Environmental Science and Pollution Research. ISSN 0944-1344, 1614-7499

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Abstract

The main objective of this paper is to estimate the interfuel substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the assumption behind the ordinary least squares (OLS) method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon-emitting fuels to renewable energy such as hydropower will substantially reduce CO2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.

Item Type:	Article
Uncontrolled Keywords:	Water-power, Interfuel substitution, Hydropower, CO2 emission mitigation, Malaysia, Trans-log cost function, Seemingly unrelated regression (SUR)
Subjects:	T Technology > TC Hydraulic engineering. Ocean engineering
Divisions:	Faculty of Business (FOB)
Depositing User:	Ms Suzilawati Abu Samah
Date Deposited:	28 Dec 2020 17:25
Last Modified:	28 Dec 2020 17:25
URII:	http://shdl.mmu.edu.my/id/eprint/8026

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