Technical innovation, renewable energy consumption, and CO₂ emissions in the USA: a cross-quantile approach

This study investigates whether technological innovation and the consumption of renewable energy tend to reduce the emissions of CO₂ in the USA by analyzing datasets from January 2010 to May 2022. The main contribution to this study is that we applied a cross-quantile approach, which possesses several strengths compared to other methods used for directional predictability. The empirical results of this research can be concluded as three points: (1) both the consumption of renewable energy and technological innovation significantly and negatively impacted the emissions of CO₂ in the short run (i.e., 1 month) across high quantiles, which gradually diminished over time (i.e., 3 months, 12 months, and 24 months), implying that technological innovation and the consumption of renewable energy possess a short-lived effect on CO₂ emissions, respectively; (2) this relationship remains significant for causal links spanning 1 and 3 months and 1 and 2 years when the consumption of renewable energy and technological innovation are treated as control variables respectively; (3) a recursive cross-quantilogram was constructed to support further our findings, which showed that the consumption of renewable energy and technological innovation tend to negatively impact the emissions of CO₂ across all quantiles. These results imply that an increase in the consumption of renewable energy and technological innovation can curb CO₂ emissions in the USA; these effects tend to be more lasting when technological innovation and the consumption of renewable energy are combined. Therefore, future policies focused on curbing the emissions of CO₂ should pay attention to the combined effect, which is the promotion of technological innovation and the exploitation of renewable energy sources in the USA.