The contribution of economic development, renewable energy, technical advancements, and forestry to Uruguay's objective of becoming carbon neutral by 2030

Abstract

Uruguay has set a target of becoming carbon neutral by the year 2030, and this study looks into the role that economic progress, renewable energy utilization, technological innovations, and forest extent could play in reaching the goal. The Dynamic Ordinary Least Squares (DOLS) technique was applied to examine time series data from 1990 to 2021. According to the outcomes of the DOLS estimation, a one-percentage-point boost in economic growth is associated with a 1.16% increase in CO2 emissions. However, increasing the use of renewable energy by 1% is related to a reduction in CO2 emissions of 0.73 percent over the long run, as indicated by the coefficient of renewable energy being negative and statistically significant. The calculated long-run coefficient of technological innovations is negative and statistically significant, suggesting that a 1% increase in technological innovation causes a 0.11% cut in CO2 emissions. The long-run coefficient of forest area is notably negative and significant, which means that expanding forest area by 1% lessens CO2 emissions by 0.56%. The empirical results show that as Uruguay's economy grows, so do its CO2 emissions, but the country may get closer to its goal of carbon neutrality through the growing use of renewable energy, technological innovation, and sustainable forest management. The robustness of the outcomes was verified by utilizing the fully modified least squares (FMOLS) and canonical cointegrating regression (CCR) techniques. In order for Uruguay to reach its goal of carbon neutrality by 2030, this article offers policy ideas centered on a low-carbon economy, promoting renewable energy utilization, financing of technological innovations, and sustainable forest management.Graphical