Dynamic Analysis of CO2 Emissions and Wind Energy in Denmark

This research article analyzes the dynamic relationship between CO2 emissions and wind energy production in Denmark, utilizing a fractional cointegration approach that incorporates various covariates. The study investigates how climate factors and demand influences affect the potential of wind power to reduce emissions. It finds that CO2 emissions decline as temperatures rise, while wind energy production is positively correlated with precipitation and North Atlantic oscillations. The research also highlights that aggregate output influences emissions in a manner consistent with the environmental Kuznets curve. The main estimate of marginal CO2 emissions avoided per MWh of wind energy produced is calculated to be 0.16 tonnes, which is statistically significant and robust to the inclusion of climate and economic variables. The analysis covers data from January 2005 to December 2019, emphasizing the importance of local climate conditions in understanding the emissions-abatement potential of wind energy in the context of Denmark's energy production.