Determinants of the Green Economy in the Sustainable Development Strategy of the Malaysian Model

Abstract

This study seeks to measure the impact and adoption of the green economy as a pivotal variable in achieving sustainable development within the Malaysian development model, while assessing the effectiveness of the strategies and visions extending to 2030. The study adopts a descriptive-analytical approach supported by quantitative indicators of green growth, analysing the performance of 79 standard indicators adopted in Malaysia’s development framework. The findings of the estimation and analysis conclude that the structural transition towards a green economy requires a dynamic adjustment of the determinants of the economic function, in which economic growth is conditional on the non-degradation of the environment and on the use of waste as a resource with added value. The study also shows the need to model the household consumption function and environmental behaviour by adapting human capital (education), and to activate the role of public–private partnership (PPP). At the sectoral level, the flexibility of the environmental transition is concentrated in six main sectors: energy, industry, transport, construction, waste management and water. The performance assessment reflects Malaysia’s position on the Green Growth Index issued by the Organisation for Economic Co-operation and Development (OECD, 2019): the country ranked fifth in Asia in the medium-performance category, which points to promising prospects for developing environmental policies and improving resource-use efficiency in the future.