Time and frequency-based effect of energy-related R&D investments on power sector CO2 emissions: evidence from leading R&D investing countries by WLMC approach

Abstract

Environmental pollution has become highly important for countries and societies because climate change and global warming are stimulated by increasing carbon dioxide (CO<inf>2</inf>) emissions. Hence all related parties have been searching for solutions. Considering the high role of energy use in causing CO<inf>2</inf> emissions energy-related research and development (R&D) investments are considered a strategic tool to curb the emissions. Accordingly the study analyzes the effect of energy-related R&D investments on power sector CO<inf>2</inf> emissions. In doing so the study examines leading R&D investing countries (namely Canada-CAN, Switzerland-CHE, Germany-DEU, France-FRA, Japan-JPN, Norway-NOR, United States-USA) considering three R&D investment sub-types (i.e. energy efficiency R&D investments-EEF, renewable energy R&D investments-RRD, nuclear energy R&D investments-NRD) uses data from 1985/Q1 to 2022/Q4 and performs Wavelet Local Multiple Correlation (WLMC) approach to analyze over times and frequencies. The results show that (i) the effects of R&D investments are weak (strong) at lower (higher) frequencies, (ii) the effects of R&D investments vary based on times frequencies and countries, (iii) the most dominant R&D type is EEF (CHE DEU FRA & JPN) RRD (CAN & NOR) and NRD (USA), (iv) there is an important externality among R&D types. Thus the findings reveal the time frequency and country-based varying effect of R&D investments on power sector CO<inf>2</inf> emissions implying a need for comprehensively balanced planning for R&D investments. Hence the countries should take the highly effective R&D investment types in combating power sector CO<inf>2</inf> emissions allocate further budget to the effective ones and re-consider the budget distribution among the R&D types. © 2025 Elsevier B.V. All rights reserved.