Investigating the determinants of carbon emissions in the USA: a state-level analysis

Abstract

The present study investigates the significant determinants of carbon emissions, namely, GDP, energy consumption, energy price, and energy expenditure, utilizing data of 50 American states from 2005 to 2016. Results obtained from application of OLS with fixed effects and panel quantile regression revealed that the effect of GDP on carbon emissions is negative but significant at all quantiles, energy consumption and energy price have a positive and significant effect on carbon emissions, while the effect of energy expenditure is negative but significant at the upper and lower quantiles, implying that high energy expenditures do not reduce carbon dioxide emission at the US state level. Policymakers should introduce further initiatives, so all the states would implement the climate legislations.

Appendix

Determinants of Emissions	State Specific Characteristics
Emission by Coal	From 2005 till 2016, the energy-related CO2 releases dropped in 41 states and grew in 9 states. For instance, In Ohio, during 2005 to 2016 coal-related CO2 releases from the electric power sector showed drop of almost 62 MMmt while the Ohio state economy raised by less than 8% in total. In the same year in Texas state, coal related CO2 releases from the electric power sector shows drop of 23 MMmt while the economy raised by almost 42%. Mostly this growth came from petroleum refining and energy-intensive industries. Within six states, coal related CO2 emissions contributed almost half of overall emissions. These six states mostly rely on coal to generate electric power. In the year 2015 till 2016, almost 36 states showed drop in energy-related CO2 emissions, whereas almost 14 states showed an increased sign. During the same years, however, national emissions dropped by nearly 2%. In 2016, coal consumption accounted for 75% of energy-related CO2 emissions in West Virginia (71 MMmt) and 71% of Wyoming’s energy-related CO2 emissions (43 MMmt)
Fuel/Petroleum	Petroleum contributed for almost more than half of emissions within 17 states. Most of these states are specified as a result of petroleum emissions particularly from the transport sector, though states like Louisiana have a substantial industrial part contributed in petroleum emissions. Similarly, natural gas contributed about half of emissions particularly in state of Alaska from industrial production and in the District of Columbia from buildings/constructions. Alabama for instance, have energy-related CO2 releases that are relatively equally distributed through fuels. California, Rhode Island, Hawaii, Vermont and Maine showed an emission of 66% (239 MMmt), 52% (5 MMmt (239 MMmt)), 92% (17 MMmt), 89% (5 MMmt) and 81% (13 MMmt) from petroleum, respectively
Emissions by sector	Vermont state during 2016 has shown the major share of emissions resulting from the transport sector almost 57%, (3 MMmt), particularly from petroleum, whereas the electric power sector contributes to 0.0% as Vermont had shown no signs of utilizing fossil fuels. Vermont’s residential sector contribute to 22% (1 MMmt), because of comparatively cold climate where petroleum usage is the major heating fuel. In contrast, Hawaii had a zero contribution of residential sector, which was the lowermost in the United States due of its nominal heating fuel need. Though, unlike Vermont, Hawaii’s electric power sector contribution was relatively high almost 36% (7 MMmt) as the use of petroleum is the major fossil fuel to generate electricity in Hawaii state. Interestingly, in the District of Columbia the combined commercial and residential sector building releases contributed almost half of the overall emissions. Louisiana is considered as the only state where emission from industrial sector contributes more than half of the total emission because of having high energy consuming petrochemical plants and refineries. The other 15 states are equally distributed in contributing more than half of the emission from electric power and transport sector, respectively. The states that shows largest share of CO2 emission came from electric power through coal, and the states that shows the highest contribution in CO2 emission from transport sector incline to usage low-carbon fuels to generate electricity and petroleum in the transportation
Per capita carbon dioxide emissions	During 2016, Wyoming was the third-largest energy producer in the United States. Unlike the largest energy producer, Texas, with a population of 28 million and the second-largest energy producer, Pennsylvania—with a population of 13 million—Wyoming state has less than 600,000 people, declaring Wyoming state as the lowest population density within the Lesser 48 states. One of the reasons is its cold winters, temperature ranges from 5 to 10 degrees Fahrenheit and hence raises Wyoming state’s per capita energy-related CO2 releases in comparison to the rest of the states. North Dakota at 72 mt per capita. West Virginia (52 mt per capita), Alaska (47 mt per capita), and Louisiana (45 mt per capita) stood as second, third, fourth and fifth highest states per capita CO2 emitters. In contrast, New York state, consisting of a population of nearly 20 million people, showed the lowest per capita CO2 emissions of almost 8 mt per capita. A big portion of the population living in the metropolitan area of New York City where organized mass transit is freely accessible and most of the dynasties are based on multi-family units that give proficiencies of scale by means of using energy for cooling and heating. The New York state economy is inclined toward less energy-consuming practices such as and hence contributed almost 6% of the U.S. population during 2016, but utilized 1% only of the nation’s industrial energy. Also the energy price in New York city is comparatively high almost 14.47 cents per kWh in comparison to country’s average use of 10.27 cents per kWh during 2016, consequently, boosts energy efficiency
Energy intensity	The states with comparatively higher energy intensities incline in cold weathers and rural or having a big industrial area as compared to the whole economy. The states with the high rates of energy-related CO2 releases per capita during 2016 also inclined to possess high energy-intensity values such as Wyoming (24,000 Btu per chained 2009 dollar of GDP), West Virginia and Louisiana both 19,000 Btu per dollar, North Dakota (16,000 Btu per dollar), and Montana and Alabama both about 14,000 Btu per dollar. California, Connecticut, Maryland, Massachusetts, and New York were ranked the lowest and each at around 3,000 Btu per dollar
Carbon intensity of the energy supply	With respect to energy intensity, the states possess a high carbon-intensive energy supply incline to be the states having higher per capita emissions such as West Virginia (79 kg CO2/MMBtu), Wyoming (76 kg CO2/MMBtu), Kentucky (72 kg CO2/MMBtu), Utah (69 kg CO2/MMBtu), Indiana, Missouri, and North Dakota all about 68 kg CO2/MMBtu. In all the above mentioned states, coal was the major emitting source of CO2. Similarly, the states possessing a lesser carbon-intensive energy supply incline to be the states with comparatively considerable non-carbon electricity generation from hydropower or nuclear. These states comprised of Washington and Oregon (both 35 kg CO2/MMBtu), New Hampshire (36 kgCO2/MMBtu), Vermont (39 kg CO2/MMBtu), Maine, South Carolina, and South Dakota (all 41 kg CO2/MMBtu)
Electricity trade	Wyoming has had an index value of 2.5 or higher since 2005 which means supplementary electricity generated and consumed in the state was trade across states. Idaho, Instead, generated almost 60% of its own electricity in 2012 till 2016. The states with high per capita emission such as Alaska, Louisiana, and Oklahoma use natural gas as a main source to generate electricity. The states use coal as the major fuel. The states with lower per capita CO2 emission doesn’t show any sign of using coal as their main fuel to generate electricity but use natural gas and non-carbon sources except Vermont who has been an important exporter of electricity in current years
Non-carbon energy	California state has increased its electricity generation through solar and wind during 2005 till 2016, but generation from nuclear and hydropower dropped during 2005 and 2016. Illinois state has increased its nuclear output from present nuclear volume by combining wind capacity in the year 2016. Pennsylvania has practiced a same pattern of Illinois. Whereas, Texas state has increased twofold its non-carbon generation from nuclear and wind capacity within the same period from 44 billion kWh during 2005 till 102 billion kWh during 2016. Likewise, Washington has always depended on hydropower generation and after adding wind capacity the state has achieved 96 billion kWh of non-carbon electric generation in the year 2016

1. Author’s compilation.
2. Source: U.S. Energy Information Administration (EIA), 2019.