Exploring CO2 emission dynamics in relation to energy security, expenditure and policy uncertainty using Quantile-on-Quantile regression: case study from USA

The ambitious target of halving carbon emissions by 2030 is a challenging goal, but the United States is making gradual progress. The sufficiency of energy resources, energy expenditure, and policy uncertainties in economies can be key determinants of achieving this goal. This study aims to empirically investigate the dynamic relationship between carbon dioxide emissions and the energy security index (ESI), energy expenditure (EE), and economic policy uncertainty (EPU) in the United States. The analysis is based on monthly frequency data derived from annual datasets spanning the period from 1985 to 2022. Empirical testing is conducted using an advanced non-parametric technique, multivariate quantile on quantile regression (QQR). The findings indicate a negative impact of the energy security index and energy expenditure on carbon dioxide emissions, as well as a significant adverse influence of EPU on emissions. This paper recommends policies, reforms, and interventions related to energy awareness, energy conservation, the promotion of green energy, reforming the energy structure, reducing energy consumption, technology improvement, and better management of the EPU to reduce emission levels in the USA.