Testing environmental Kuznets curve for the USA under a regime shift: the role of renewable energy

The goals of this paper are to examine whether the environmental Kuznets curve (EKC) holds and to investigate whether renewable energy consumption can decrease CO₂ emissions in the USA using monthly data spanning the period 2000:M01-2018:M07. For these purposes, the paper employs a cointegration test with a regime shift and observes the long-run coefficients before and after the regime shift. The findings support the presence of the EKC. The findings also indicate that renewable energy consumption has negative effects on CO₂ emissions, while these effects are greater when the share of renewable energy consumption in total energy consumption is higher in the USA. Theoretical and practical implications for these findings are discussed.