A Study on the Nexus between Fiscal Policy and CO2 Emissions:Evidence from Japan

• Main Authors: Wei-Chun Chang, 張瑋群
• Other Authors: 洪鳴丰
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/zw6dy2

碩士 === 淡江大學 === 產業經濟學系碩士班 === 106 === After 1990, Japan has adopted expansionary fiscal policy to alleviate economic difficulties and stimulated economic growth. This paper takes Japan’s data from 1980 to 2016 for a total of 37 years to understand whether fiscal policy will affect CO2 emissions. I empirically analyze the long-term equilibrium and short-term dynamic relationships among CO2 emissions, government expenditure, private consumption, private non-residential investment, and real GDP. In this paper, ADF unit root test and KPSS unit root test are first used to confirm that all variables are stationary of I(1). Then, Johansen co-integration test about trace test and maximum eigenvalue test are used to find a set of co-integration vector relations. The results showed that there is a long-term equilibrium relationship between them. VECM model and impulse response function are further used to analyze the short-term correction adjustment process between variables. The main findings are summarized as follows: 1. There is a long-term negative relationship between Japan’s fiscal policy and CO2 emissions. When government expenditure increases, it will reduce CO2 emissions. In the short-term dynamic adjustment process, it is found that when government expenditure increases, CO2 emissions will also be significantly reduced. This is presumably due to the government''s increased investment in environmental quality. Therefore, government expenditure increases will reduce CO2 emissions. 2. Private consumption and private non-residential investment have a significant long-term positive relationship with CO2 emissions. Because the private sector invested in heavily polluting industries rather than green energy or low-pollution industries, increased private non-residential investment and consumption will increase CO2 emissions. 3. The effect of real GDP on CO2 emissions presents a significant long-term negative relationship. From 1995 to 2015, it can be found that the industrial structure of Japan has changed (the industrial part of GDP has decreased from 34.65% to 29.143%).The influence effect of real GDP to CO2 emissions demonstrate negative effect in long term.