Unveiling the role of renewable energy in mitigating environmental degradation and energy poverty

This study applies wavelet coherence analysis to examine if transitioning to green energy through renewable energy consumption (RE) could reduce environmental degradation (carbon dioxide emissions, CO2) and energy poverty by comparing high income, middle income and low income countries. The data spanned from 2000 to 2023. The results reveal strong negative correlation between RE and CO2, verifying that RE could lead to environmental quality improvement in all groups of countries in the short term, but less effective in the long term. The correlation between RE and energy poverty (EP1 – access to electricity; EP2- access to clean fuel) varies across countries. The low income group experienced the improvement in energy poverty (EP1 and EP2) in the short term, while the impacts of RE on energy poverty is mixed in the high and middle income groups. Hence, transitioning to green energy is most beneficial to low income group.