Navigating sustainability in the US: A comprehensive analysis of green energy, eco-innovation, and economic policy uncertainty on sectoral CO2 emissions

Abstract

The United States is the world's second-largest polluter, generating 4.7 billion metric tons of CO2 in 2020. To combat it, the US is targeting a precise goal of 50–52 percent decrease in net CO2 emissions from 2005 levels by 2030. Hence, it is vital to determine the critical factors contributing to Sustainable Development Goals (SDGs). With this motivation, this study examines dynamic link between green energy transition, eco-innovation, economic policy uncertainty, energy use, economic growth, and sectoral CO2 emissions (SCO2) in the United States from 1980 to 2020 by using novel Quantile-On-Quantile Regression (QQR) and Granger causality in quantile approaches. The results show that the quantiles of the green energy transition are positively related to all SCO2 quantiles. While eco-innovation and SCO2 are marginally favorable in the lower to higher quantiles, positive slope coefficients showcase the effect of economic policy uncertainty on SCO2 in the 0.2–0.95 quantiles. Similarly, SCO2 and the energy use showed positive and negative results across quantiles, whereas QQR slope coefficients between SCO2 and economic growth are positive and negative throughout the quantiles. Suggests that investment in green energy and eco-innovation also reduces economic policy uncertainty by delivering energy for all sectors is vital if SDG-7 is executed by 2030.