Linkages Between Energy Productivity, Resource Utilisation, and Environmental Sustainability in Italy: Evidence from Wavelet Quantile Methods

Climate policy in Italy has come to treat energy and resource productivity as central levers, reflecting a broader recognition that how efficiently an economy uses energy and materials shapes its environmental outcomes. This study aims to investigate the dynamic nexus between energy productivity, resource productivity, and carbon dioxide (CO2) emissions in Italy. To do this, this study uses quarterly time series data from 2000 to 2022 and employs wavelet quantile methods, specifically wavelet quantile regression and wavelet quantile correlation. The wavelet quantile correlation reveals that a euro per kilogram unit change in resource productivity negatively correlates with CO2 emissions by approximately −0.9 metric tonnes, and a euro per kilogram of oil equivalent unit change in energy productivity negatively correlates with CO2 emissions by approximately −0.9 metric tonnes across all periods and quantiles, particularly in the long term. Moreover, the findings of wavelet quantile regression reveal that, in the long run, a euro per kilogram unit change in resource productivity and a euro per kilogram of oil equivalent unit change in energy productivity reduce CO2 emissions across all periods and quantiles by approximately −0.40 and −1.0 metric tonne, respectively. The study recommends that stakeholders in Italy should invest in both short- and long-term energy productivity programs, such as investing in smart appliances that adjust energy consumption and a Combined Heat and Power (CHP) System, as all will be effective. Beyond its methodological novelty, Italy’s dualistic industrial base and EU-driven decarbonisation commitments make it a substantively useful case for a distributional, multi-horizon analysis of this kind.