Asymmetric environmental performance under economic complexity, globalization and energy consumption: Evidence from the World's largest economically complex economy

In spite of the constraint for better environmental defense and the realization of the Sustainable Development Goals (SDGs), natural gas, coal, and oil consumption holds to dictate Japan's power mix. Considering this concern, this study scrutinizes the impact of globalization, economic complexity, and renewable and fossil fuel energy consumption on ecological footprint for the period of 1990-2020 with various systematic methods (e.g. structural break unit root and cointegration tests and long-run and short-run nonlinear relationship). The empirical findings of this study reveal that positive shocks in structural changes, globalization, and renewable energy significantly protect environmental quality in Japan by reducing the country's ecological footprint. Similarly, a negative shock in renewable energy also increases environmental quality in the long-run. However, negative shocks in globalization and fossil fuels cause to increase the level of environmental pollution. Similarly, a positive shock in fossil fuel energy also increases ecological footprint level in the long-run. Likewise, the short -run coefficient signs are also similar to the long-run coefficient sign but different in significance level and magnitude. This has paved the way for a well-designed policy structuring from the policymakers and government of Japan with the spotlight on the processes of structural change and energy consumption in the globalized world.

Automated summary

This study examines the impact of globalization, economic complexity, and renewable and fossil fuel energy consumption on Japan's ecological footprint. The findings demonstrate that positive shocks in structural changes, globalization, and renewable energy contribute to the protection of environmental quality in Japan, while negative shocks in renewable energy and fossil fuels increase the ecological footprint. The short-term coefficients exhibit similar trends to the long-term coefficients but differ in significance and magnitude.