Do coal efficiency, climate policy uncertainty and green energy consumption promote environmental sustainability in the United States? An application of novel wavelet tools

Abstract

In 2020, the United States produced 4.7 billion metric tons of CO2, making it the world's second-largest polluter. To achieve the SDGs, the United States has committed to reducing net CO2 emissions by 50–52% from 2005 levels by 2030. Therefore, this study examines the co-movement between CO2 and coal efficiency, climate policy uncertainty, green energy, and green innovation using data from 1990 to 2020. To support policymakers in developing sustainable energy policies at various times, we used wavelet cohesion, wavelet correlation, wavelet coherence, and the novel causality in continuous wavelet transform to investigate these connections. The wavelet coherence and wavelet cohesion results revealed that coal efficiency contributes to reducing CO2 emissions at different frequencies and times, while climate policy uncertainty reduces CO2 emissions in the long term. Moreover, green energy consumption and green innovation improve ecological quality by reducing CO2 in the short and medium term. Furthermore, wavelet causality analysis revealed that all indicators could predict CO2 emissions at different frequencies and time periods. Based on the overall findings of this research, we recommend that policymakers in the United States support green energy and energy efficiency initiatives as the most effective ways to reduce CO2 and address other critical climate issues.