Dissecting the Structural Shift in Greenhouse Gas Emissions in Japan Amidst the Nexus of Natural Resource Rents, Income, and Population Growth: An Econometric Analysis

Human economic activities, aimed at rapid growth, contribute significantly to greenhouse gas emissions, thereby accelerating climate change and raising concerns about sustainability, particularly in the context of the United Nations Sustainable Development Goals (UNSDGs). The study's objectives align with UNSDG Goal 15, which seeks to minimise the impact of human activities on the environment and halt further environmental degradation. This study explores the structural shifts in greenhouse gas emissions in Japan by examining the relationship between total greenhouse gases, natural resource rents, real income, and population from 1970 to 2018. Utilising the novel autoregressive distributed lag (ARDL) model and dynamic quantile ARDL techniques, the analysis reveals an annual equilibrium convergence rate of approximately 34%–36%. The multivariate VECM causality system identifies significant long-run causal relationships, indicating the influence of these covariates on maintaining a stable equilibrium. In the short run, one-way causality is observed from resource rents, per capita income, and squared per capita income to total emissions. Long-term findings suggest that reductions in natural resource rents, per capita GDP, and population growth contribute to improved atmospheric quality. The results support the Environmental Kuznets Curve (EKC) hypothesis, confirming the existence of an ‘inverted U-curve’ for Japan. Furthermore, the robust quantile ARDL aligns these findings with the net probabilistic effects in both short- and long-term scenarios. By applying innovative accounting decomposition frameworks, the study shows that changes in greenhouse gas emissions, resource rents, and population growth consistently lead to reduced emissions in Japan. Overall, these findings provide empirical support for Japan's goal of achieving net carbon neutrality by 2050 and underscore the importance of adhering to transformative policy measures.