The impact of economic policy uncertainty, renewable energy adoption, and eco-innovation on sectoral CO₂ emissions in the United States

Abstract

In 2022, emitting 4.8 billion metric tonnes of carbon dioxide (CO2), the United States ranked as the global second-biggest polluter. In order to address this, the US has set a specific target of reducing net carbon dioxide emissions by 50–52 % from the peak of 2006 by 2030. For this reason, identifying the most important elements that will help achieve the SDGs is of the utmost importance. This study looked at how the relationships between green energy transitions (ET), ecological innovation (EI), economic policy uncertainty (EPU), energy consumption (EU), economic growth (EG), and sectoral CO₂ emissions changed from 1982 to 2022. It used advanced Quantile-on-Quantile Regression (QQR) and Quantiles Granger Causality test (QGC). The result highlights a positive correlation between overall sectoral CO2 quantiles and ET quantiles. In the lowest to upper quantiles, EI and sectoral CO2 are slightly positive; however, in the 0.2–0.95 quantiles, the rising slope values demonstrate that EPU affects SCO2. In a similar vein, sectoral CO2 and energy consumption exhibited mixed results across quantiles, while the QQR slope values for sectoral CO2 and economic growth exhibited mixed results throughout quantiles as well. It is crucial to make investments in ET and ecological innovation in order to achieve the Sustainable Development Goals-7 by 2030. This will reduce EPU and ensure that all sectors have access to energy.