Thesis (MSc) - Cyprus International University. Institute of Graduate Studies and Research Economics

This study aims to portray the growth-energy-environment relationship in Luxembourg by performing a yearly data covering the years from 1970 to 2021. Economic growth, population growth, and disaggregated energy use into renewable and non-renewable sources are employed to investigate the impact of each on environmental quality as measured by CO2 emissions. ARDL Bounds cointegration test was established to explore the long run relationship among the variables, and ARDL approach was employed to estimate the long run impact of the determinants on CO2 emissions while ECM was employed for the short run analysis. The study showed that renewable energy improves environmental quality in the short run while oil consumption contributes to environmental degradation in the long run. Though, the study results did not validate the presence of the EKC in Luxembourg, it led to conclude that economic growth and sustainable environmental quality can both coexist if feasible anti-pollution laws are enacted, fossil fuel supply is reduced, and further research is made to increase the capacity of renewable energy sources and raise their percentage contribution to energy supply. The study further suggests that policies that encourage the supply and patronage of renewable energy and the application of machine learning in further research can improve environmental quality in Luxembourg.