Assessment of the role of renewable energy consumption and trade policy on environmental degradation using innovation accounting: Evidence from the US

By O. Usman, Andrew Adewale Alola, S. Sarkodie. Renewable Energy, 2020

245 citations recorded by the source corpus.

Renewable energy technologies are promising, yet, very little is known about its role as a limiting factor in fossil fuel-attributable environmental degradation — especially in high-income countries. This study investigated the dynamic effect of renewable energy consumption, economic growth, biocapacity and trade policy on environmental degradation in the United States from 1985Q1 to 2014Q4. To achieve this objective, the study applied an autoregressive distributed lag (ARDL) model to obtain the long-run and short-run dynamic coefficients. Toda-Yamamoto causality test was used to examine the direction of causality while Cholesky decomposition test was for innovative accounting to validate the estimated models. The empirical results divulged that a decline in environmental degradation can be attributed to an increase in renewable energy consumption through its negative effects on ecological footprint. Economic growth and biocapacity were found to exert upward pressure on ecological footprint; however, trade policy exerts downward pressure on ecological footprint. A two-sided causal relationship was established between economic growth and ecological footprint as well as economic growth and biocapacity. In contrast, a one-way causality was confirmed running from trade policy to renewable energy consumption and from renewable energy consumption to biocapacity. The innovative accounting revealed that 14.79% and 8.41% of renewable energy consumption and trade policy caused 0.60% and 9.88% deterioration in the environment. Hence, country-specific energy policies that increase the share of renewable energy in the energy portfolio are recommended.

Subfields: Economics and Econometrics, Environmental Engineering, Pollution

View Paper: https://www.semanticscholar.org/paper/e30f479cdda140cae79b5e0edd5d7ff221dda91e

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. F. Bekun
2. Andrew Adewale Alola
3. Festus Fatai Adedoyin
4. S. Sarkodie

In Environmental Engineering

1. F. Bekun
2. Festus Fatai Adedoyin
3. Andrew Adewale Alola

In Pollution

1. Andrew Adewale Alola
2. F. Bekun
3. Festus Fatai Adedoyin

Citations in the corpus

• Growth impact of transition from non-renewable to renewable energy in the EU: The role of research and development expenditure (2020, background): “Moreover, most countries in the early stage of development and those experiencing economic growth easily oversight the potential environmental pollutionwith economic boom visibly apparent [2,10,11], therefore, the higher the drive for economic growth, the higher the environmental pollution [6].”