Renewable energy, fossil fuels, and globalization: Policy lessons from Japan for a sustainable future
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Abstract
The direct use of the load capacity factor to measure environmental quality has opened up a new area in the analysis of environmental quality determinants. In this context, this study identifies renewable energy, non-renewable energy, and globalization as explanatory variables for the load capacity factor in the Japanese economy. Using annual data from 1990 to 2021, this study applies the ARDL bounds test, FMOLS, and DOLS estimators. The results indicate that the series are stationary in differences and that a long-term relationship exists between the variables. The FMOLS and DOLS estimates confirm that the use of renewable energy increases the load capacity factor, while the use of non-renewable energy and globalization decreases it. Thus, renewable energy usage improves environmental quality, whereas non-renewable energy usage and globalization worsen it. The empirical findings emphasize the need to support the renewable energy sector to improve environmental quality, while also highlighting the necessity to reconsider the strategies related to globalization and the non-renewable energy sector.
Keywords
Abstract
The direct use of the load capacity factor to measure environmental quality has opened up a new area in the analysis of environmental quality determinants. In this context, this study identifies renewable energy, non-renewable energy, and globalization as explanatory variables for the load capacity factor in the Japanese economy. Using annual data from 1990 to 2021, this study applies the ARDL bounds test, FMOLS, and DOLS estimators. The results indicate that the series are stationary in differences and that a long-term relationship exists between the variables. The FMOLS and DOLS estimates confirm that the use of renewable energy increases the load capacity factor, while the use of non-renewable energy and globalization decreases it. Thus, renewable energy usage improves environmental quality, whereas non-renewable energy usage and globalization worsen it. The empirical findings emphasize the need to support the renewable energy sector to improve environmental quality, while also highlighting the necessity to reconsider the strategies related to globalization and the non-renewable energy sector.
