The effects of green growth, environmental-related tax, and eco-innovation towards carbon neutrality target in the US economy

Abstract

This study aims to examine the nexus between green growth and carbon neutrality targets in the context of the USA while observing the role of ecological innovation, environmental taxes, and green energy. For this purpose, data were collected from 1970 to 2015 for all the variables of interest. This research utilized the quantile autoregressive distributed lag (QARDL) method due to its various benefits, such as depicting the causality patterns based on different quantiles for different variables like green growth, ecological innovation, environmental taxes, and renewable energy. The findings through the QARDL method showed that the error correction coefficient was significant and negative with the expected negative sign for the different quantiles. The findings showed a significant and negative impact of green growth, square of green growth, ecological innovation, and environmental taxes in determining the carbon dioxide (CO2) emissions for the USA's economy under the long-run estimation. Meanwhile, the outcome for the short-term estimation confirmed that the past and lagged values of CO2 emission were significantly and negatively linked with the current and lagged values of CO2 emission. On the other hand, it was found that green growth and square of green growth, ecological innovation, environmental taxes, and renewable energy played their vital role in reducing haze pollution like PM2.5. Besides, this research also covers the limitations and policy implications.