A new perspective into the impact of renewable and nonrenewable energy consumption on environmental degradation in Argentina: a time–frequency analysis

Abstract

In most nations across the world, the fundamental goal of economic policy is to achieve sustainable economic growth. Economic development, on the other hand, may have an influence on climate change and global warming, which are major worldwide concerns and problems. Thus, this research offers a new perceptive on the influence of renewable and nonrenewable energy consumption on CO2 emissions in Argentina utilizing data from the period between 1965 and 2019. The current research applied the wavelet tools to assess these interconnections. The outcomes of these analyses reveal that the association between the series evolves over both frequency and time. The current analysis uncovers notable wavelet coherence and significant lead and lag connections in the frequency domain, while in the time domain, contradictory correlations are indicated among the variables of interest. From an economic perspective, the outcomes of the wavelet analysis affirm that in the medium and long term, renewable energy consumption contributes to environmental sustainability. Furthermore, in the medium term, trade openness mitigates CO2, although in the long term, no significant connection was found. Moreover, both nonrenewable energy and economic growth contribute to environmental degradation in the short and long term. Finally, the frequency domain causality outcomes reveal that in the long term, economic growth, trade openness, and nonrenewable energy can predict CO2 emissions. The present analysis offers an innovative insight into the interconnection and comovement between CO2 and trade openness, renewable energy utilization, and GDP in the Argentinean economy. The findings from this research should be of interest to economists, researchers, and policymakers.