Investigating the Relationship between Education Expenditure, Female Employment, Renewable Energy Consumption, and CO2 Emissions in Sri Lanka

This study investigates the dynamic relationship between education expenditure, female employment, renewable energy consumption, and CO₂ emissions in Sri Lanka from 1990 to 2021, employing the Autoregressive Distributed Lag (ARDL) and Fully Modified Ordinary Least Squares (FMOLS) methodologies. While existing literature often examines these variables in isolation, this research integrates them within a unified framework to address gaps in understanding synergistic effects and temporal trade-offs in developing economies. Using time-series data from the World Development Indicators, the analysis reveals a dual role for education expenditure: a short-term rise in emissions (0.78% per 1% increase) due to energy-intensive infrastructure expansion, contrasting with a long-term reduction (1.65%) driven by green innovation and behavioral shifts. Female employment shows no significant impact, attributed to occupational segregation in low-influence sectors like agriculture (78% of employed women). Renewable energy consumption exhibits marginal short-term effects (-2.66%, *p* = 0.085) but more substantial long-term potential (-2.68%, *p* = 0.001), hindered by fossil fuel subsidies and grid instability. The ARDL bounds test confirms cointegration (F-statistic = 6.090), with rapid error correction (99.1% annual adjustment). Methodological robustness is validated via FMOLS, emphasizing structural barriers in gender equity and energy transitions. The findings challenge the universal applicability of the Environmental Kuznets Curve, advocating context-specific models for island economies. Policy recommendations include reallocating 20% of education budgets to green infrastructure, mandating 30% female representation in energy governance, and phasing out fossil fuel subsidies to prioritize decentralized renewables. This study contributes actionable insights for aligning Sri Lanka’s socio-economic investments with climate resilience, offering a model for resource-constrained nations pursuing Sustainable Development Goals (SDGs) 4, 5, and 7.