The nexus between CO2 emissions, energy consumption, and economic growth in the U.S.

Abstract

This study investigates the relationship between carbon dioxide (CO2) emissions, energy consumption, and economic growth (GDP) in the U.S. at the state level during 1997–2016. This study uses various quantitative approaches including static models as well as dynamic models to measure the impacts of GDP and different types of energy consumption including total, non-renewable, renewable, industrial, and residential energy on CO2 emissions across states. Results show that a long-run relationship exists among various types of energy consumption and CO2 emissions at the state level for both static and dynamic models. Total, non-renewable, industrial, and residential energy consumption have a positive impact on CO2 emissions, while renewable energy consumption has a negative relationship with CO2 emissions. The findings show an inverted-U shape relationship between CO2 emissions and GDP which provides enough evidence to validate the Environmental Kuznets Curve (EKC) hypothesis across states. The results are robust across states using both static and dynamic models. Policy makers may use our findings to define applicable polices to reduce CO2 emissions across U.S. states.