Abstract

The electricity sector plays a crucial role inMalaysia's economic development, while also serving as a majorcontributor to national carbon emissions. Using the LogarithmicMean Divisia Index (LMDI), we analyze the factors influencingcarbon emissions changes within Malaysia's electricity sectorfrom 2001 to 2019. Our analysis reveals that the fuel structureeffect emerged as the primary driver of emission increases,accounting for 30.5%, whereas improvements in coalconsumption efficiency and generation structure contributedonly 3.5% and 7.8% to emissions, respectively. Transmissionand distribution losses, combined with socioeconomic factorssuch as Gross Domestic Product (GDP) per capita andpopulation growth, further contributed to increases in emissions.Despite advancements in energy efficiency and the deploymentof renewable energy, these measures have not sufficiently offsetthe sector’s dependence on carbon-intensive energy sources.These findings highlight the urgent need for targeted policyinterventions, including the accelerated integration ofrenewable energy, modernization of power grid infrastructure,and the promotion of innovation in low-carbon technologies.Such actions are imperative to align Malaysia’s transitiontoward a low-carbon economy with the dual imperatives ofeconomic growth and environmental sustainability.