Published on
September 2, 2025
Malaysia’s tourism sector has become a key driver of economic growth, significantly contributing to GDP and employment. However, this booming industry also comes with rising energy consumption and carbon emissions, especially in transportation and hospitality. While tourism boosts Malaysia’s economy, it places increasing pressure on the environment, making it essential to strike a balance between economic benefits and sustainability. By focusing on high-value tourism and reinvesting revenues into green infrastructure and sustainable practices, Malaysia has the opportunity to align growth with environmental responsibility.
Tourism is a significant contributor to Malaysia’s economic growth, but it also increases energy consumption and carbon emissions, especially in sectors such as transport and hospitality. A recent study highlights the paradox that while tourism boosts economic activity, it also brings escalating environmental costs. However, it also suggests that higher tourism receipts, if reinvested in green infrastructure and sustainable practices, could help mitigate the ecological impact.
The study, conducted by researchers from several Malaysian universities, explores the complex relationship between tourism, energy use, and carbon emissions in Malaysia. By analyzing data from 1995 to 2020, the researchers utilized sophisticated econometric models to explore the interplay between tourist arrivals, expenditure, and tourism receipts with energy consumption, GDP growth, and environmental impacts. The findings underscore that tourism is driving Malaysia’s economy but also amplifying its carbon footprint.
Tourism as a Pillar of Malaysia’s Economic Growth
Tourism has long been an essential pillar of Malaysia’s economic structure. In 2019, the country welcomed nearly 26 million international tourists, a number close to its population size. By 2023, tourism contributed around 15% to Malaysia’s GDP, providing jobs for nearly a quarter of the workforce. This vital sector has boosted numerous industries, including hospitality, retail, transportation, and entertainment, while also contributing to the nation’s foreign reserves. The study underscores the positive correlation between tourism-related increases in arrivals, spending, and receipts with GDP growth, which can range from 0.26% to 0.54%. This supports the well-established “tourism-driven growth theory,” emphasizing tourism as a vital force behind economic stability and national prosperity.
Energy Demand from a Growing Industry
However, the benefits of tourism come with an increase in energy consumption. The study reveals that a 1% rise in tourist arrivals or expenditures corresponds to a 0.3% to 0.6% increase in energy consumption. Among the various sectors, transportation emerges as the largest contributor, accounting for over a third of the nation’s energy use, including 29% of fossil fuel consumption—figures that far exceed the global average. In addition, hotels, restaurants, and leisure facilities also contribute to the energy burden as tourists demand air conditioning, lighting, and various other energy-intensive services. This growing reliance on fossil fuels poses a challenge to Malaysia’s long-term sustainability goals, which include aspirations for carbon neutrality.
The Carbon Emissions Dilemma
One of the study’s key findings is the contrast between the volume of tourism and the quality of revenue generated in relation to carbon emissions. While an increase in tourist arrivals and spending correlates with higher carbon emissions, tourism receipts—the actual income earned from tourism—are linked to long-term reductions in emissions. Specifically, the study shows that a 1% increase in tourism receipts is associated with a 0.1% decline in carbon emissions. This suggests that higher-value tourism generates more fiscal resources, which can then be reinvested in renewable energy projects, eco-friendly infrastructure, and other sustainable practices. In short, what matters is not just how many tourists visit Malaysia but how much they spend and how effectively that revenue is channeled into green initiatives.
Pathways to a Greener Future
The researchers suggest several measures for Malaysia to reconcile its tourism-driven economic growth with its environmental objectives. First and foremost, the country must reduce its dependence on fossil fuels within the tourism sector. This could be achieved by investing in renewable energy sources and incentivizing hotels, restaurants, and leisure facilities to adopt energy-efficient technologies and sustainable practices, such as solar energy, waste-reduction measures, and energy-efficient cooling systems. Additionally, the development of sustainable transport infrastructure, such as eco-friendly public transit and bicycle-friendly initiatives, could help reduce emissions from the tourism industry.
Equally important is the transformation of tourism itself. The study calls for a shift toward ecotourism, cultural tourism, and adventure tourism, which tend to exert less strain on natural resources compared to mass tourism. Malaysia can further enhance its sustainability efforts by linking tourism revenue to conservation efforts in national parks, marine reserves, and heritage sites. By investing in the preservation of these natural and cultural assets, Malaysia can ensure that future generations can enjoy them while benefiting from sustainable economic growth.
Regional cooperation within Southeast Asia is also encouraged, as neighboring countries face similar challenges. By collaborating on shared goals, such as integrating renewable energy, promoting sustainable tourism, and developing eco-friendly transport systems, Malaysia can contribute to a broader regional movement toward sustainability. This collective approach could amplify the positive impacts of sustainable tourism across the region.
The Balancing Act for the Future
The findings of the study send a clear message: while tourism has been a blessing for Malaysia’s economy, it has also become a burden on its environment. The current challenge lies in finding harmony between the economic advantages of tourism and its environmental impact. If Malaysia can focus on high-value tourism and reinvest the resulting revenue into sustainable practices, it could significantly reduce its carbon footprint while continuing to thrive as a leading tourist destination.
Ultimately, Malaysia has the opportunity to become a model of sustainable development in Southeast Asia. By prioritizing quality tourism over quantity and making green investments in infrastructure and conservation, the country can transform tourism from an environmental liability into a powerful tool for sustainability. With the right approach, Malaysia could not only showcase its natural beauty and cultural heritage but also lead the way in promoting a sustainable and prosperous future for tourism worldwide.
