Assessing the CO2 Emissions and Energy Source Consumption Nexus in Japan

Abstract

This research investigates the variation in the impact of different energy sources on carbon dioxide (CO2) emissions in Japan during the period from January 2019 to March 2023. The results of the Autoregressive Distributed Lag (ARDL) model suggest that a 1% increase in energy consumption produced through the photovoltaic (PV) decreases carbon emission by 0.053% in the short-run. Conversely, a 1% increase in coal, oil, and liquefied natural gas (LNG) leads to an increase in CO2 emissions by 0.317%, 0.038%, and 0.214%, respectively. The study also reveals an inverted-U-shaped relationship between CO2 emissions and economic growth, represented by the Nikkei stock index. The research emphasizes the critical need for Japan to prioritize investments and incentives in renewable energy technologies such as the PV systems, which have been demonstrated to effectively reduce CO2 emissions in Japan. This is essential to uphold long-term ecological balance and to proactively support the ongoing reduction in CO2 intensity, a key objective outlined in the Paris Agreement.