Resource efficiency, energy productivity, and environmental quality in Japan

Abstract

This paper proposes to identify the effect of resource efficiency and energy productivity on environmental quality in Japan over the period of 1990Q1-2020Q4 while controlling economic growth and globalization. The focus of this research is to provide some insightful findings by undertaking robust empirical research to support Sustainable Development Goals. The present study employs novel estimators, namely nonlinear autoregressive distributed lag (N-ARDL), Fourier autoregressive distributive lag cointegration (F-ADL-C), Diks and Panchenko asymmetric causality (DPA-C), and gradual shift causality (GS-C) tests. Both nonlinear bounds and F-ADL-C tests confirm the long-run association among the time series variables. Moreover, positive stock to resource efficiency has a negative impact on environmental degradation, while negative stock to resource efficiency raises consumption-based CO2 emissions. In addition, rising energy productivity causes to decrease in consumption-based CO2 emissions. Finally, the GS-C and DPA-C tests also reveal that resource efficiency and energy productivity are important predictors of consumption-based CO2 emissions in Japan.