Can urbanization, renewable energy, and economic growth make environment more eco-friendly in Northeast Asia?

Abstract

With the development of urbanization, the urban areas in Northeast Asian countries have become major sources of growth in terms of energy consumption, economic output, and CO2 emissions. However, little research has focused on the relationships among per capita CO2 emissions, real output, non-renewable and renewable energy, and urbanization in five Northeast Asian countries (China, Japan, Mongolia, Russia, and South Korea). In this study, panel methodologies have been used to investigate the relationships based on the 20-year period of 1995–2014. Six stationary tests and three co-integration methods indicate that the selected variables are first difference stationary and exhibit co-integration relationships. The long-run estimations reveal that disaggregated energy (both non-renewable and renewable) and urbanization increase CO2 emissions, while economic growth reduces CO2 emissions. To test the relationships between the selected variables, homogeneous Granger causality is implied. Bidirectional causality is only found between non-renewable energy and CO2 emissions, while unidirectional causalities exists between the other selected variables. The study results suggest that governments should allocate urban resources reasonably, to make smart urban. Policymakers should pay more attention to non-renewable and renewable energy. Non-renewable energy needs to be more efficient, while renewable energy needs to be popularized.