Integrating Fuzzy MCDM Methods and ARDL Approach for Circular Economy Strategy Analysis in Romania

Abstract

This study investigates the factors influencing CO2 emissions in Romania from 1990 to 2023 using the Autoregressive Distributed Lag (ARDL) model. Before the ARDL model, we identified a set of six policies that were ranked using Fuzzy Electre, Topsis, DEMATEL, and Vikor. The multi-criteria decision-making (MCDM) methods have highlighted the importance of a circular policy on CO2 emission reduction, which should be a central focus for policymakers. The results of the ARDL model indicate that, in the long term, renewable energy production reduces CO2 emissions, showing a negative relationship. Conversely, an increase in patent applications and urbanization contributes to higher CO2 emissions, reflecting a positive impact. In total, five key factors were analyzed: CO2 emissions per capita, patent applications, gross domestic product, share of energy production from renewables, and urbanization. Notably, GDP does not significantly explain CO2 emissions in the long run, suggesting that economic growth alone is not a direct driver of CO2 emission levels in Romania. This decoupling might result from improvements in energy efficiency, shifts towards less carbon-intensive industries, and the increased adoption of renewable energy sources. Romania has implemented effective environmental regulations and policies that mitigate the impact of economic growth on CO2 emissions.

Keywords

• circular economy
• Fuzzy Electre
• Fuzzy Topsis
• Fuzzy Vikor
• fuzzy DEMATEL
• ARDL