Mediating role of energy uncertainty for environmental management in electricity generation: The evidence from Pakistan

Abstract

This groundbreaking study examines the relationship between CO2 intensity, aggregated and disaggregated fossil fuels, clean and nuclear energy, and, as a mediating variable, energy uncertainty for Pakistan during 2019M01 and 2022M10 with monthly data. To this end, the ARDL Bound Testing method is used to identify the long-run relationship of the studied factors. The empirical results suggest that under the mediating effect of energy uncertainty, renewables and nuclear energy in electricity generation have a negative association with CO2 intensity. In contrast, fossil fuels in generating electricity influence positively CO2 intensity in the aggregated analysis. Moreover, the disaggregated results under the mediating role of energy uncertainty reveal that only hydro energy reduces CO2 intensity as renewables, bioenergy, wind, and solar energy do not impact CO2 intensity. Both coal and gas energies cause a rise in CO2 intensity. Regarding nuclear energy, it also has a negative relation with CO2 intensity. The increase in energy uncertainty leads to a fall in CO2 intensity in aggregated and disaggregated analyses as well. Wavelet coherence analysis shows that CO2 intensity and energy uncertainty depend on each other dynamically for almost the whole employed period.