Abstract
This study investigates the Granger causal interplays between renewable energy consumption, WTI crude oil prices, and CO2 emissions in the USA using monthly data between January 1986 and May 2022. The study applies quantile-based techniques, namely, the quantile unit root test developed by Galvao (2009), the quantile cointegration test proposed by Xiao (2009), and the novel Granger causality-in-quantiles test suggested by Troster (2018). The results suggest that the series display a unit root across different quantiles and that the cointegration relationships exhibit heterogeneous behavior across quantiles. Regarding the causal linkages, the findings show: (i) a unidirectional causality from renewable energy consumption to oil prices, mainly at the lowest or highest quantiles of the distribution, (ii) a bidirectional causality between oil prices and CO2 emissions mainly in the middle and extreme quantiles, but there is evidence of causality from oil prices to CO2 emissions across the quantiles than in the reverse direction, and (iii) a unidirectional causality from renewable energy consumption to CO2 emissions at the lowest to medium and the highest quantiles. These findings have important implications for policy-makers.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
The datasets used and analyzed during the whole study are available from the public website.
Notes
We do not report the results in order to save space. They are available upon the request to authors.
References
Adebayo TS, Acheampong AO (2022) Modelling the globalization-CO2 emission nexus in Australia: evidence from quantile-on-quantile approach. Environ Sci Pollut Res 29:9867–9882. https://doi.org/10.1007/s11356-021-16368-y
Agbanike TF, Nwani C, Uwazie UI et al (2019) Oil price, energy consumption and carbon dioxide (CO2) emissions: insight into sustainability challenges in Venezuela. Lat Am Econ Rev 28:1–26. https://doi.org/10.1186/s40503-019-0070-8
Ahmed Z, Cary M, Shahbaz M, Vo XV (2021) Asymmetric nexus between economic policy uncertainty, renewable energy technology budgets, and environmental sustainability: evidence from the United States. J Clean Prod 313:127723. https://doi.org/10.1016/j.jclepro.2021.127723
Al-maamary HMS, Kazem HA, Chaichan MT (2016) The impact of oil price fl uctuations on common renewable energies in GCC countries. Renew Sustain Energy Rev 0–1. https://doi.org/10.1016/j.rser.2016.11.079
Ali M, Tursoy T, Samour A et al (2022) Testing the impact of the gold price, oil price, and renewable energy on carbon emissions in South Africa: novel evidence from bootstrap ARDL and NARDL approaches. Resour Policy 79:102984. https://doi.org/10.1016/j.resourpol.2022.102984
Alshehry AS, Belloumi M (2015) Energy consumption, carbon dioxide emissions and economic growth: the case of Saudi Arabia. Renew Sustain Energy Rev 41:237–247. https://doi.org/10.1016/j.rser.2014.08.004
Andersson FNG, Karpestam P (2013) CO2 emissions and economic activity: short- and long-run economic determinants of scale, energy intensity and carbon intensity. Energy Policy 61:1285–1294. https://doi.org/10.1016/j.enpol.2013.06.004
Anwar A, Siddique M, Dogan E, Sharif A (2021a) The moderating role of renewable and non-renewable energy in environment-income nexus for ASEAN countries: evidence from method of moments quantile regression. Renew Energy 164:956–967. https://doi.org/10.1016/j.renene.2020.09.128
Anwar A, Chaudhary AR, Malik S, Bassim M (2021b) Modelling the macroeconomic determinants of carbon dioxide emissions in the G-7 countries: the roles of technological innovation and institutional quality improvement. Glob Bus Rev:OnlineFirst. https://doi.org/10.1177/09721509211039392
Anwar A, Malik S, Ahmad P (2022b) Cogitating the role of technological innovation and institutional quality in formulating the sustainable development goal policies for E7 countries: evidence from quantile regression. Glob Bus Rev, 09721509211072657. https://doi.org/10.1177/09721509211072657
Anwar A, Sinha A, Sharif A, Siddique M, Irshad S, Anwar W, Malik S (2022a) The nexus between urbanization, renewable energy consumption, financial development, and CO2 emissions: evidence from selected Asian countries. Environ Dev Sustain 24:6556–6576. https://doi.org/10.1007/s10668-021-01716-2
Apergis N, Payne JE (2014) The causal dynamics between renewable energy, real GDP, emissions and oil prices: evidence from OECD countries. Appl Econ 46:4519–4525. https://doi.org/10.1080/00036846.2014.964834
Baskaya M, Samour A, Tursoy T (2022) the financial inclusion, renewable energy and CO2 emissions nexus in the BRICS nations: new evidence based on the method of moments quantile regression. Appl Ecol Env Res 20(3):2577–2595. https://doi.org/10.15666/aeer/2003_25772595
Bekun FV, Alola AA, Sarkodie SA (2019) Toward a sustainable environment: nexus between CO2 emissions, resource rent, renewable and nonrenewable energy in 16 EU countries. Sci Total Environ 657:1023–1029. https://doi.org/10.1016/j.scitotenv.2018.12.104
Ben Jebli M, Ben Youssef S, Apergis N (2015) The dynamic interaction between combustible renewables and waste consumption and international tourism: the case of Tunisia. Environ Sci Pollut Res 22:12050–12061. https://doi.org/10.1007/s11356-015-4483-x
Ben Jebli M, Farhani S, Guesmi K (2020) Renewable energy, CO2 emissions and value added: empirical evidence from countries with different income levels. Struct Chang Econ Dyn 53:402–410. https://doi.org/10.1016/j.strueco.2019.12.009
Ben-Salha O, Hakimi A, Zaghdoudi T, Soltani H, Nsaibi M (2022) Assessing the impact of fossil fuel prices on renewable energy in China using the novel dynamic ARDL simulations approach. Sustainability-Basel 14(16):10439. https://doi.org/10.3390/su141610439
Bilgili F, Koçak E, Bulut Ü (2016) The dynamic impact of renewable energy consumption on CO2 emissions: a revisited environmental Kuznets curve approach. Renew Sustain Energy Rev 54:838–845. https://doi.org/10.1016/j.rser.2015.10.080
Brini R, Amara M, Jemmali H (2017) Renewable energy consumption, international trade, oil price and economic growth inter-linkages: the case of Tunisia. Renew Sustain Energy Rev 76:620–627. https://doi.org/10.1016/j.rser.2017.03.067
British Petroleum (2022) BP statistical review of world energy 2022. https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy
Cheon A, Urpelainen J (2012) Oil prices and energy technology innovation: an empirical analysis. Glob Environ Chang 22:407–417. https://doi.org/10.1016/j.gloenvcha.2011.12.001
Chien F, Anwar A, Hsu CC, Sharif A, Razzaq A, Sinha A (2021) The role of information and communication technology in encountering environmental degradation: proposing an SDG framework for the BRICS countries. Technol Soc 65:101587. https://doi.org/10.1016/j.techsoc.2021.101587
Djellouli N, Abdelli L, Elheddad M, Ahmed R, Mahmood H (2022) The effects of non-renewable energy, renewable energy, economic growth, and foreign direct investment on the sustainability of African countries. Renew Energy 183:676–686. https://doi.org/10.1016/j.renene.2021.10.066
Dogan E, Ozturk I (2017) The influence of renewable and non-renewable energy consumption and real income on CO2 emissions in the USA: evidence from structural break tests. Environ Sci Pollut R 24(11):10846–10854
Farhani S (2013) Renewable energy consumption, economic growth and CO2 emissions: evidence from selected MENA countries. Energy Econ Lett 1:24–41. https://doi.org/10.1007/s11356-017-8786-y
Galvao AF (2009) Unit root quantile autoregression testing using covariates. J Econom 152:165–178. https://doi.org/10.1016/j.jeconom.2009.01.007
Gozgor G, Kumar M, Demir E, Padhan H (2020) The impact of economic globalization on renewable energy in the OECD countries. Energy Policy 139:111365. https://doi.org/10.1016/j.enpol.2020.111365
Greenley HL (2019) The world oil market and U.S. policy: background and select issues for congress. Key Congr Reports Febr 2019 Part III 3–30
Grodzicki T, Jankiewicz M (2022) The impact of renewable energy and urbanization on CO 2 emissions in Europe – spatio-temporal approach. Environ Dev 44:100755. https://doi.org/10.1016/j.envdev.2022.100755
Guo Y, Yu C, Zhang H, Cheng H (2021) Asymmetric between oil prices and renewable energy consumption in the G7 countries. Energy 226:120319. https://doi.org/10.1016/j.energy.2021.120319
Hasanov FJ, Khan Z, Hussain M, Tufail M (2021) Theoretical framework for the carbon emissions effects of technological progress and renewable energy consumption. Sustain Dev 29(5):810–822. https://doi.org/10.1002/sd.2175
Henriques I, Sadorsky P (2008) Oil prices and the stock prices of alternative energy companies. Energy Econ 30:998–1010. https://doi.org/10.1016/j.eneco.2007.11.001
Hu H, Xie N, Fang D, Zhang X (2018) The role of renewable energy consumption and commercial services trade in carbon dioxide reduction: evidence from 25 developing countries. Appl Energy 211:1229–1244. https://doi.org/10.1016/j.apenergy.2017.12.019
Ike GN, Usman O, Alola AA, Sarkodie SA (2020) Environmental quality effects of income, energy prices and trade: the role of renewable energy consumption in G-7 countries. Sci Total Environ 721:137813. https://doi.org/10.1016/j.scitotenv.2020.137813
International Energy Administration (2021) Global energy review 2021. IEA, Paris https://www.iea.org/reports/global-energy-review-2021
Intergovernmental Panel on Climate Change (2018) Global warming of 1.5°C. Available at: https://www.ipcc.ch/sr15
Intergovernmental Panel on Climate Change (2021) Climate change 2021: the physical science basis. Available at: https://www.ipcc.ch/report/ar6/wg1
Jauhari H, Dewata Dr E, Lestari Zainal Ridho S, Miskiyah N (2019) renewable energy consumption, CO2 emissions and economic growth in Indonesia. 29–36. https://doi.org/10.5220/0008436500290036
Joof F, Samour A, Tursoy T, Ali M (2022) Climate change, insurance market, renewable energy, and biodiversity: double-materiality concept from BRICS countries. Environ Sci Pollut R:1–14. https://doi.org/10.1007/s11356-022-24068-4
Kabeyi MJB, Olanrewaju OA (2022) Sustainable energy transition for renewable and low carbon grid electricity generation and supply. Front Energy Res 9:1–45. https://doi.org/10.3389/fenrg.2021.743114
Kartal MT, Samour A, Adebayo TS, Depren SK (2023) Do nuclear energy and renewable energy surge environmental quality in the United States? New insights from novel bootstrap Fourier Granger causality in quantiles approach. Prog Nucl Energ 155:104509. https://doi.org/10.1016/j.pnucene.2022.104509
Kassouri Y, Bilgili F, Kuşkaya S (2022) A wavelet-based model of world oil shocks interaction with CO2 emissions in the US. Environ Sci. Policy 127:280–292. https://doi.org/10.1016/j.envsci.2021.10.020
Khezri M, Heshmati A, Khodaei M (2022) Environmental implications of economic complexity and its role in determining how renewable energies affect CO2 emissions. Appl Energy 306:117948. https://doi.org/10.1016/j.apenergy.2021.117948
Koenker R, Xiao Z (2004) Unit root quantile autoregression inference. J Am Stat Assoc 99:775–787. https://doi.org/10.1198/016214504000001114
Li R, Su M (2017) The role of natural gas and renewable energy in curbing carbon emission: case study of the United States. Sustainability-Basel 9(4):600. https://doi.org/10.3390/su9040600
Liu H, Anwar A, Razzaq A, Yang L (2022) The key role of renewable energy consumption, technological innovation and institutional quality in formulating the SDG policies for emerging economies: evidence from quantile regression. Energ Reports 8:11810–11824. https://www.sciencedirect.com/science/article/pii/S2352484722016754
Mehdi BJ, Slim BY (2017) The role of renewable energy and agriculture in reducing CO2 emissions: evidence for North Africa countries. Ecol Indic 74:295–301. https://doi.org/10.1016/j.ecolind.2016.11.032
Mensah IA, Sun M, Gao C et al (2019) Analysis on the nexus of economic growth, fossil fuel energy consumption, CO2 emissions and oil price in Africa based on a PMG panel ARDL approach. J Clean Prod 228:161–174. https://doi.org/10.1016/j.jclepro.2019.04.281
Menyah K, Wolde-Rufael Y (2010) CO2 emissions, nuclear energy, renewable energy and economic growth in the US. Energ Policy 38(6):2911–2915. https://doi.org/10.1016/j.enpol.2010.01.024
Millstein D, Wiser R, Bolinger M, Barbose G (2017) The climate and air-quality benefits of wind and solar power in the United States. Nat. Energy 2(9):1–10. https://doi.org/10.1038/nenergy.2017.134
Mohamued EA, Ahmed M, Pypłacz P, Liczmańska-Kopcewicz K, Khan MA (2021) Global oil price and innovation for sustainability: the impact of R&D spending, oil price and oil price volatility on GHG emissions. Energies 14(6):1757. https://doi.org/10.3390/en14061757
Moutinho V, Robaina M (2016) Is the share of renewable energy sources determining the CO2 kWh and income relation in electricity generation? Renew Sustain Energy Rev 65:902–914. https://doi.org/10.1016/j.rser.2016.07.007
Mukhtarov S, Mikayilov JI, Humbatova S, Muradov V (2020) Do high oil prices obstruct the transition to renewable energy consumption? Sustain 12:1–16. https://doi.org/10.3390/su12114689
Mukhtarov S, Mikayilov JI, Maharramov S et al (2022) Higher oil prices, are they good or bad for renewable energy consumption: the case of Iran? Renew Energy 186:411–419. https://doi.org/10.1016/j.renene.2021.12.135
Murshed M, Tanha MM (2020) Oil price shocks and renewable energy transition: empirical evidence from net oil-importing South Asian economies. Energy, Ecol Environ. https://doi.org/10.1007/s40974-020-00168-0
Nakhli MS, Shahbaz M, Jebli MB, Wang S (2022) Nexus between economic policy uncertainty, renewable & non-renewable energy and carbon emissions: contextual evidence in carbon neutrality dream of USA. Renew. Energy 185:75–85
Nguyen KH, Kakinaka M (2019) Renewable energy consumption, carbon emissions, and development stages: some evidence from panel cointegration analysis. Renew Energy 132:1049–1057. https://doi.org/10.1016/j.renene.2018.08.069
Nwani C (2017) Causal relationship between crude oil price, energy consumption and carbon dioxide (CO2) emissions in Ecuador. OPEC Energy Rev 41:201–225. https://doi.org/10.1111/opec.12102
Pata UK, Samour A (2022) Do renewable and nuclear energy enhance environmental quality in France? A new EKC approach with the load capacity factor. Prog Nucl Energ 149:104249. https://doi.org/10.1016/j.pnucene.2022.104249
Perera F (2018) Pollution from fossil-fuel combustion is the leading environmental threat to global pediatric health and equity: Solutions exist. Int J Env Res Pub He 15(1):16. https://doi.org/10.3390/ijerph15010016
Quitzow R (2021) Energy transitions and societal change. Berliner Strasse, Germany: Institute of Advanced Sustainability Studies. Available: https://www.iass-potsdam.de/en/research-area/energy-systems-and-societal-change (Accessed, 2022)
Raggad B (2021) Time-varying causal relationship between renewable energy consumption, oil prices and economic activity: new evidence from the United States. Resour Policy 74:102422. https://doi.org/10.1016/j.resourpol.2021.102422
Sadorsky P (2009) Renewable energy consumption, CO2 emissions and oil prices in the G7 countries. Energy Econ 31(3):456–462. https://doi.org/10.1016/j.eneco.2008.12.010
Sahu PK, Solarin SA, Al-Mulali U, Ozturk I (2022) Investigating the asymmetry effects of crude oil price on renewable energy consumption in the United States. Environ Sci Pollut R 29(1):817–827. https://doi.org/10.1007/s11356-021-15577-9
Saidi K, Omri A (2020) Reducing CO2 emissions in OECD countries: do renewable and nuclear energy matter? Prog Nucl Energy 126:103425. https://doi.org/10.1016/j.pnucene.2020.103425
Sakov A, Bickel PJ (2000) An Edgeworth expansion for the m out of n bootstrapped median. Stat Probab Lett 49:217–223. https://doi.org/10.1016/S0167-7152(00)00050-X
Sharif A, Mishra S, Sinha A, Jiao Z, Shahbaz M, Afshan S (2020) The renewable energy consumption-environmental degradation nexus in Top-10 polluted countries: fresh insights from quantile-on-quantile regression approach. Renew Energy 150:670–690. https://doi.org/10.1016/j.renene.2019.12.149
Troster V (2018) Testing for Granger-causality in quantiles. Econom Rev 37:850–866. https://doi.org/10.1080/07474938.2016.1172400
Troster V, Shahbaz M, Uddin GS (2018) Renewable energy, oil prices, and economic activity: a Granger-causality in quantiles analysis. Energy Econ 70:440–452. https://doi.org/10.1016/j.eneco.2018.01.029
Twumasi YA (2017) Relationship between CO2 emissions and renewable energy production in the United States of America. Arch Curr Res Int 7(1):1–12. https://doi.org/10.9734/ACRI/2017/30483
Ullah S, Chishti MZ, Majeed MT (2020) The asymmetric effects of oil price changes on environmental pollution: evidence from the top ten carbon emitters. Environ Sci Pollut Res 27:29623–29635. https://doi.org/10.1007/s11356-020-09264-4
U.S. Energy Information Administration (2022) Monthly energy review. Available at: https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf
Vohra K, Vodonos A, Schwartz J, Marais EA, Sulprizio MP, Mickley LJ (2021) Global mortality from outdoor fine particle pollution generated by fossil fuel combustion: results from GEOS-Chem. Environ Res 195:110754. https://doi.org/10.1016/j.envres.2021.110754
Wang X, Bai M, Xie C (2019) Investigating CO2 mitigation potentials and the impact of oil price distortion in China’s transport sector. Energy Policy 130:320–327. https://doi.org/10.1016/j.enpol.2019.04.003
Xiao Z (2009) Quantile cointegrating regression. J Econom 150:248–260. https://doi.org/10.1016/j.jeconom.2008.12.005
Xu W, Jahanger A, Inuwa N, Samour A, Ibrahim SS (2022) Testing the impact of external sovereign debt on Turkey’s ecological footprint: new evidence from the bootstrap ARDL approach. Front Env Sci-Switz 1692. https://doi.org/10.3389/fenvs.2022.1010534
Yang Q, Huo J, Saqib N, Mahmood H (2022) Modelling the effect of renewable energy and public-private partnership in testing EKC hypothesis: evidence from methods moment of quantile regression. Ren Energy 192:485–494. https://doi.org/10.1016/j.renene.2022.03.123
Ye C, Chen Y, Inglesi-Lotz R, Chang T (2020) CO2 Emissions converge in China and G7 countries? Further evidence from Fourier quantile unit root test. E E 31:348–363. https://doi.org/10.1177/0958305X19867082
Yu J, Tang YM, Chau KY, Nazar R, Ali S, Iqbal W (2022) Role of solar-based renewable energy in mitigating CO2 emissions: evidence from quantile-on-quantile estimation. Ren Energy 182:216–226. https://doi.org/10.1016/j.renene.2021.10.002
Zaghdoudi T (2017) Oil prices, renewable energy, CO2 emissions and economic growth in OECD countries. Econ Bull 37:1844–1850
Zhao Y, Zhang Y, Wei W (2021) Quantifying international oil price shocks on renewable energy development in China. Appl Econ 53(3):329–344. https://doi.org/10.1080/00036846.2020.1808173
Zmami M, Ben-Salha O (2020) Oil price and the economic activity in GCC countries: evidence from quantile regression. Equilibrium 15(4):651–673. https://doi.org/10.24136/eq.2020.028
Zou X (2018) An analysis of the effect of carbon emission, GDP and international crude oil prices based on synthesis integration model. Int J Energy Sect Manag 12:641–655. https://doi.org/10.1108/IJESM-10-2017-0013
Zoundi Z (2017) CO2 emissions, renewable energy and the environmental Kuznets curve, a panel cointegration approach. Renew Sustain Energy Rev 72:1067–1075. https://doi.org/10.1016/j.rser.2016.10.018
Acknowledgements
The author would like to thank the Deanship of Scientific Research at Majmaah University for supporting this work under Project Number No. R-2023-18.
Author information
Authors and Affiliations
Contributions
BR: conceptualization, methodology, data processing, software, formal analysis, writing (original draft preparation), validation, formal analysis, investigation, and review and editing.
Corresponding author
Ethics declarations
Competing interests
The author declares no competing interests.
Additional information
Responsible Editor: Ilhan Ozturk
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Raggad, B. Quantile causality and dependence between renewable energy consumption, WTI prices, and CO2 emissions: new evidence from the USA. Environ Sci Pollut Res 30, 52288–52303 (2023). https://doi.org/10.1007/s11356-023-25899-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-25899-5