| Summary: | Palm oil is a major global commodity that is vital for the well-being of many communities. Despite its significant contribution to the attainment of the 2030 Sustainable Development Goals, such as zero hunger, decent work and economic growth, palm oil has been criticised for its negative impact on the environment due to deforestation and its cultivation processes. The palm oil sustainability contribution is imbalanced and not coherent with the three pillars of sustainability, namely profit, economics, and the environment, which casts doubt on the palm oil status quo. Increasing Environmental Kuznets curve (EKC)-based studies on the linear impact of agriculture on carbon dioxide (CO2) offer some insights; however, the nonlinear relationships (the asymmetric effects of positive and negative shocks) between the palm oil industry and CO2 are rarely examined, and the postulating literature is incomplete. Thus, this study aims to analyse the symmetric and asymmetric impacts of palm oil production on CO2 emissions based on time series data for Malaysia from 1978 to 2018. The novelty of this research lies in the asymmetric nonlinear autoregressive distributed lag model, which reveals that rising palm oil production reduces CO2 in the long run, while reducing palm oil production increases emissions. The research also found significant effects of renewable energy consumption, oil demand, and trade openness on CO2 emissions. Considering the future perspective, this study discusses and offers evidence that supports the EKC hypothesis through linear and nonlinear analyses, which verifies the relevance of studies on the symmetric and asymmetric EKC. Furthermore, this study provides an in-depth discussion of the implications for policymaking, with the expansion of palm oil production representing a solution to environmental degradation. Graphical abstract: [Figure not available: see fulltext.] © 2022, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.
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