Is Globalization Detrimental to CO2 Emissions in Japan? New Threshold Analysis

Abstract

Using annual data 1970Using annual data -2014, this paper examines the effects of globalization on CO2 emissions in Japan while accounting for economic growth and energy consumption as potential determinants of carbon emissions. The structural breaks and asymmetries arising due to policy shifts require attention and hence an asymmetric threshold version of the ARDL model is utilized. The results show the presence of threshold asymmetric cointegration between the variables. The threshold-based positive and negative shocks arising in globalization increase carbon emissions, while the impact of the latter is more profound. Energy consumption (economic growth) also has a significant positive effect on carbon emissions. Globalization, economic growth and energy consumption significantly increase carbon emissions in the short run. We suggest that policy makers in Japan should consider globalization and energy consumption as policy tools while formulating their policies towards protecting sustainable environmental quality in the long run. Otherwise, the Japanese economy may continue to face environmental consequences such as undesirable climate change and massive warming at the micro and macro levels as a result of potential shocks arising from globalization and energy consumption.Keywords: Carbon emissions, energy consumption, globalization, threshold NARDL Acknowledgement: This paper is produced with no funding from any organizations.2

UK's net-zero carbon emissions target: Investigating the potential role of economic growth, financial development, and R&D expenditures based on historical data (1870–2017)

“…(2015) using a time series framework for India, found a significant role of economic growth for environmental quality. In contrast, Shahbaz et al. (2018b) found that economic growth deteriorates environmental quality in Japan.…”

Impact of globalization on CO2 emissions in Vietnam: An autoregressive distributed lag approach

“…The empirical results reveal that globalization increases carbon emissions, and thus the globalization-driven carbon emissions hypothesis is valid. Shahbaz et al (2017b) examine the effects of globalization on CO2 emissions in Japan by using annual data from 1970 to 2014 and an asymmetric threshold version of the ARDL model. They conclude that globalization significantly increases carbon emissions in Japan in the short run.…”

“…Composition effect has a direct link with economic activities and carbon emissions due to agricultural, industrial, and service sector pollution intensity. As the economy moves from agriculture to the industrial sector, carbon dioxide emissions increases, and when it advances from the industrial sector to service sector, it begins to decline (Shahbaz et al, 2018). Hence, globalization may have a significant impact on carbon dioxide emissions (environment degradation).…”

Does the environmental Kuznets curve exist between globalization and energy consumption? Global evidence from the cross‐correlation method

“…Thus, although advanced countries use high-energy-intensive technology in economic activities, they will still suffer from increasing carbon emissions generated by developing countries due to the closer integration of these economies at the global level through globalization (Shahbaz, Shahzad, & Mahalik, 2017;Shahbaz, Shahzad, Mahalik, & Sadorsky, 2018). It impacts energy consumption through its influence on production, consumption, and transportation of products as well as through the diffusion of technology across borders.…”

“…2 Eventually, the increasing carbon emissions linked with a massive energy use of developing countries will add to global carbon emissions. Thus, although advanced countries use high-energy-intensive technology in economic activities, they will still suffer from increasing carbon emissions generated by developing countries due to the closer integration of these economies at the global level through globalization (Shahbaz, Shahzad, & Mahalik, 2017;Shahbaz, Shahzad, Mahalik, & Sadorsky, 2018).…”