Journal
RENEWABLE ENERGY
Volume 177, Issue -, Pages 1408-1420Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.renene.2021.06.018
Keywords
Economic complexities; CO2 emissions; Novel dynamic ARDL; Renewable energy; Coal energy; Japan
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Japan is ranked as the most complex economy globally, and aims to reduce emissions by boosting cleaner energy sources. The study demonstrates that increasing renewable energy and economic complexity can help decrease carbon emissions in the long run, presenting a potential path for Japan to achieve its ambitious energy and environmental targets.
According to the Economic Complexity Index, Japan was the number 1 most complex economy in the world. In addition to complexity, Japan pledges to reduce emissions by boosting cleaner energy sources. This study simulates two policies to highlight a path for Japan in achieving this ambitious energy and environmental target. The novel dynamic autoregressive distribution lag (ARDL) model and Kernel-based regularized least squares (KRLS) are adopted over panel data from 1970 to 2018. Empirical evidence from the ARDL and dynamic ARDL models shows that CO2 emissions have a significant long-term relationship with GDP per capita, renewable energy, and economic complexity index while air transport is significant in the short run. Putting it more elaborately, a unit increase in GDP per capita increase the emission by 0.84%-0.96% in the long run and 0.46%-0.48% in the short run. As regards renewable energy, a unit increase in it decrease the carbon emission by 0.07% and 0.04% in the long-run and short-run respectively. Also, an increase in the economic index diminished the emission by 0.81% in the long run. Moreover, economic complexity moderates the role of GDP in environmental degradation as it also has a significant impact on carbon emission. (c) 2021 Elsevier Ltd. All rights reserved.
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