Economic growth and carbon emissions nexus: environmental sustainability a case of Japan from East Asia

Economic growth plays a vital and instrumental role in the economic development of any country. Still, on the other side, it is also one of the important causes of environmental degradation. The increase in carbon emissions is one of the fundamental reasons for climate change and global warming. Japan’s global economic and technological leadership, combined with its ambitious carbon neutrality goals by 2050, makes it a compelling case for understanding the interplay between economic growth, renewable energy adoption, and carbon emissions. We took annual time series data for the dependent variable as Carbon Emissions and explanatory variables as Gross Domestic Product and Renewable Energy for the period ranging from 1990 to 2020. We applied the Autoregressive Distributed Lags Bounds test to gauge the long-run relationship between the variables; the empirical findings revealed the existence of a long-run relationship among the variables of the model. GDP has a significant positive impact on carbon emissions whereas renewable energy has a significant negative impact on carbon emissions. Furthermore, we also found renewable energy is unidirectional causing CO2. Based on these findings, we recommend targeted policies to reduce carbon emissions, including stricter regulations for high-emission industries and expanded investments in renewable energy infrastructure. These measures will support Japan's path to carbon neutrality while fostering sustainable economic growth.