Does economic policy uncertainty, energy transition and ecological innovation affect environmental degradation in the United States?

Abstract

Climate change traps heat, affecting a variety of species in already dry areas. Severe storms, earthquakes, plagues, and food delivery problems are all exacerbated by climate change caused by emissions of greenhouse gases. The United States, the world’s largest economy and second-largest carbon emitter is expertly planning to reduce its environmental difficulties and help the accomplishment of the United Nations Sustainable Development Goals (SDGs) 7 and 13. Given that, the study explores the renewable energy transition, ecological innovation, economic policy uncertainty, and globalization from 1990 to 2019 by using novel econometric approaches augmented ARDL and gradual shift causality. The results show that variables are cointegrated, particularly in the long and short term; renewable energy transition and economic policy uncertainty reduce carbon emissions, while ecological innovation contributes to long-run depletion in CO₂ emission. Globalization significantly accelerates emissions in the long and short term. Furthermore, gradual shift causation reveals that renewable energy transition and globalization are unidirectional, but economic policy uncertainty is bidirectional. Finally, the conclusion implies that transitioning from fossil to renewable energy, adequate use of technology, efficient management of policy uncertainties and globalization may contribute to the United States meeting SDGs 7 and 13.