Renewable and non-renewable energy policy simulations for abating emissions in a complex economy: Evidence from the novel dynamic ARDL

Festus Fatai Adedoyin, Ilhan Ozturk, Festus Bekun, Phillips O. Agboola and Mary Oluwatoyin Agboola

Renewable Energy, 2021, vol. 177, issue C, 1408-1420

Abstract: 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.

Keywords: Economic complexities; CO2 emissions; Novel dynamic ARDL; Renewable energy; Coal energy; Japan (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:177:y:2021:i:c:p:1408-1420

DOI: 10.1016/j.renene.2021.06.018

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