Jingchi Wen, Babatunde Sunday Eweade, Huseyin Ozdeser, Berna Uzun
Reducing carbon emissions remains a major challenge for Lithuania under the European Green Deal, particularly due to the dominance of energy-related emissions and evolving economic dynamics. This study investigates the key drivers of CO₂ emissions, focusing on energy intensity, research and development (R&D), waste management, international legal compliance, economic growth, and trade openness over the period 1996Q1-2024Q4. To capture nonlinear, time-varying, and frequency-dependent relationships, the study employs advanced wavelet-based techniques, including Wavelet Power Spectrum, Wavelet Coherence, and Partial Wavelet Coherence. The findings reveal that energy intensity is the most dominant and persistent driver of emissions, exhibiting strong long-run effects, while economic growth also contributes positively, confirming the presence of scale effects. In contrast, R&D and institutional quality show conditional and time-dependent emission-reducing impacts, whereas waste management plays a relatively weak and indirect role. Based on these results, the study recommends prioritizing energy efficiency improvements, strengthening green innovation policies, enhancing institutional effectiveness, and accelerating the transition toward renewable energy systems to achieve sustainable emission reductions.