Toward Carbon Neutrality: An Empirical Analysis of CO2 Drivers on South Korea’s Carbon Emissions

Abstract

This study investigates the determinants of CO2 emissions in South Korea, studying the potential impact of renewable energy, green technology innovations, population, energy usage and per capita income from 1990 to 2023. We analyzed annual time-series data using unit root test with breaks, a bootstrap ARDL cointegration, and Granger causation test under a STIRPAT framework to reach valid conclusion. The empirical results suggest the presence of long-run equilibrium relationship between the variables. Additionally, the findings demonstrate that green technology innovations and renewable technology reduced CO2 emissions, whereas energy usage, population growth and per capita income, contributed positively to the environmental degradation. The findings indicate the presence of bidirectional causality between CO2 emissions and all the key determinants. This implies that it is crucial to introduce and synchronize policies stimulating and continuing innovations in renewable energy and green technology, as well as mitigating the escalating energy demands and consumptions caused by an increase in population and per capita income. The findings of the current study contribute pertinent policy implementations for South Korea's planned policies in reaching carbon neutrality by the year 2050.