Climate policy uncertainty and renewable energy consumption at crossroads: designing SDG policies for the United States

ABSTRACT

Climate change, originating from greenhouse gas emissions, yields profound implications such as escalated temperatures, severe storms, disruptions in food supply chains, and amplified seismic activity, particularly impacting arid regions. As the world’s largest economy and the second-largest CO₂ emitter, the United States actively leads initiatives aimed at addressing environmental challenges and aligning with the United Nations’ Sustainable Development Goals (SDGs) 7 and 13. This study delves into the determinants shaping renewable energy consumption and CO₂ emissions within the United States, aiming to elucidate their pivotal role in advancing carbon neutrality efforts. Using quarterly data spanning from 1990 to 2020, this investigation employs the time-varying TVP-SV-VAR model to dissect the dynamic interplay among these variables. The findings reveal intricate connections across short, medium, and long-term periods: renewable energy adoption, eco-innovations, and uncertainties in climate policy were observed to mitigate CO₂ emissions. Conversely, financial development exhibited a consistent association with increased CO₂ emissions across all timeframes. Additionally, the progression of renewable energy sources showcased responsiveness to climate policy uncertainties, eco-innovations, and financial development across each timeframe. These outcomes hold substantial implications for the United States’ pursuit of carbon neutrality goals, emphasizing the pivotal role of promoting renewable energy initiatives.

KEYWORDS:

• Climate policy uncertainty
• CO₂ emissions
• eco-innovation
• renewable energy
• time-varying

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data is readily available at request from the corresponding author

Additional information

Funding

The authors extend their appreciation to the deanship of scientific research at King Khalid University for funding this work through a large group project under grant number [RGP.2/242/44]