Investigating the environmental and economic dimensions of household, commercial, and industrial energy intensities in the USA

Abstract

As the global ambition is directed at net-zero 2050 amidst energy intensity-efficiency targets, the advanced economies, such as the United States of America (USA) has been consistently charged with more target-driven commitments. Considering this, the current study finds the influence of commercial, industrial, and household energy intensities on both the economic and environmental indicators. A set of cointegration approaches was employed to evaluate the long-run and short-run relationship between covariates and carbon emission over the period 1974–2019. Empirical findings reveal that all the covariates are positive and significantly related to carbon emissions. For instance, the emission of carbon dioxide is worsened by economic growth in both the short- and long-run. Additionally, intense use of energy across the commercial, household, and industrial sectors is responsible for an increase in environmental degradation arising from the emission of carbon emission. Importantly, environmental degradation that is attributed to energy intensity is far more (twice) in the commercial sector and household sector, than in the industrial sector. Regarding the economic aspects, there is statistical evidence that research and development expenditure in energy efficiency improves economic growth while higher energy intensities in the commercial and industrial sectors are detrimental to economic expansion. As a policy, the study suggests that the share of renewable or clean energy technology in the country’s energy mix should be significantly increased to over-turn the undesirable economic, environmental, and global warming-related issues in the United States. Other few directions for policy implication were addressed.