The substitution of fossil fuels in the US transportation energy mix: Are emissions decoupling from economic growth?

Abstract

Environmental protection should be a primary factor in the evolution of the dominant transportation energy paradigm. This paper takes a fresh approach to this issue by analysing the relationship between conventional and alternative energy sources in transportation, economic growth and emissions. This is a previously unexplored topic in literature, particularly in the United States of America (US), which is analysed in detail here. The paper makes a further contribution to the field by an analysis, based on Tapio indicator, of decoupling between economic growth and CO2 emissions resulting from both overall energy consumption and energy consumption by the transportation. Empirically, this paper applies an Autoregressive Distributed Lag model by using monthly data from January 2007 to September 2018. A Decoupling Indicator was calculated by using yearly data from 2006 to 2018. Main findings suggest that alternative energy sources have not yet reducing the dependence of the transportation sector on fossil fuels. Additionally, although the use of renewable fuels by transportation reduces CO2 emissions, it also hampers economic growth, while economic growth has a negative effect on emissions. This finding is further supported by the decoupling statuses found. I Improvements in energy efficiency appear to have been effective for environmental protection.