Lowering Uncertainty for Sustainable Development: Assessing the Effectiveness of Green Innovation

Abstract

One of the fundamental challenges on the path to sustainability is the interruption caused by various uncertainties. This studyexamines how clean energy technology interacts with sustainability uncertainty across different timescales and frequencies, usingdata from March 2013 to March 2025. Wavelet coherence and partial wavelet coherence analyses are used to explore the dynamicrelationships, accounting for the influence of oil futures. The results indicate a dynamic relationship between clean energy technol-ogy and sustainability uncertainty. While clean technology and sustainability uncertainty moved in opposite directions between2014 and 2015, there were positive co-movements from 2017 to 2021. Most changes were driven by clean technology and wereevident only in the short term, whereas movements were nearly synchronized in the medium term, with indications of long-termsynchronization. Therefore, sustainability uncertainty may be triggered by the market signal effect, which causes most short-termdisturbances. However, this relationship is not entirely independent of oil futures, especially in the long term. This suggests that along-term sustainability path is not independent of oil market dynamics. Consequently, long-term sustainability strategies couldbe more effective by leveraging attractive clean technology stock indices to improve sustainable finance.