Energy Policy 174 (2023) 113469

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Energy Policy
journal homepage: www.elsevier.com/locate/enpol

Overcoming the shock of energy depletion for energy policy? Tracing the
missing link between energy depletion, renewable energy development and
decarbonization in the USA
Mohammad Razib Hossain a, b, Sanjeet Singh c, Gagan Deep Sharma d, *,
Simona-Andreea Apostu e, f, Pooja Bansal c
a
School of Economics and Public Policy, Adelaide Business School, The University of Adelaide, Australia
b
Department of Agricultural Finance and Cooperatives, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Gazipur, Bangladesh
c
University Centre for Research and Development, Chandigarh University, Gharuan, Mohali, Punjab, India
d
University School of Management Studies, Guru Gobind Singh Indraprastha University, Sector 16C, Dwarka, New Delhi, 110078, India
e
Bucharest University of Economic Studies, Romania
f
Institute of National Economy, Bucharest, Romania

A R T I C L E I N F O A B S T R A C T

Keywords: In purifying the world’s atmosphere and deterring the negative externalities from the excessive usage of fossil
Energy depletion fuels, researchers have indoctrinated the global community to look for alternatives to fossil fuels, which is also in
Non-renewable energy depletion line with the Glasgow Climate Pact (COP26). To unveil how to absorb energy depletion shock, this paper turns
Economic growth
the spotlight on the dynamic relationship between CO2 emissions, energy depletion, renewable energy devel­
CO2 emissions
Dynamic ARDL
opment, and economic growth in the USA, spanning from 1980 to 2019. We have applied the novel dynamic
USA ARDL model to reach our empirical conclusions. Our results unveil that economic growth negatively affects the
USA’s ecological balance. We observe that energy depletion negatively affects CO2 emissions in the short and
long-term, ameliorating USA’s environmental sustainability. Additionally, the transition to renewables lessens
the overall pollution in the long-run. Overall, energy depletion can fix the loopholes within the USA’s natural
environment and atmosphere; however, it can be scary for higher authorities, given that it may curb economic
growth. Therefore, the USA should judiciously estimate and juxtapose the costs and benefits of energy depletion
and transition to renewables. If the cost is too high, the country can consider a phase-to-phase transition rather
than a complete 100% transition.

1. Introduction
Our natural environment is going through continuous hardships due
to our insane actions. Now and then, these actions are triggering natural
havoc, causing irreversible losses to our lives, properties, and natural
resources. Developed nations have better risk absorption capacities
induced by disturbances to the natural environment due to technological
forwardness (Afawubo and Noglo, 2022). However, developing coun­
tries suffer the most due to violations of environmental laws (Aryal et al.,
2020). We have witnessed that our planet has transitioned through
various stages where the industrial revolution, staggering technological
advancement, urbanization, rapid economic growth, and agriculture 4.0
are some of the significant stages we have collaboratively achieved.
Today’s world has unleashed many new opportunities, where energy
sources have always been key protagonists in designing new policies
(Chien, 2022). Energy has been and will remain the cornerstone of
economic growth worldwide (Liu and Hao, 2018; Stern, 2019; K. H.
Wang et al., 2021). However, the energy sources on which we rely for
our economic amelioration are highly sourced from the natural envi­
ronment, most specifically the old-school fossil energies, which, if
exposed and burnt, can breed deleterious effects and cause damage to
the earth’s natural atmospheric sustainability (Tawalbeh et al., 2021).
Today, energy has become a relative indicator of how powerful a nation
is in the global hemisphere, which is why global leaders are dedicating
more money and efforts to trace new sources of petroleum hydrocarbons
buried under the ground (Erdoğan et al., 2020; McBeath et al., 2022).

* Corresponding author.
E-mail addresses: mohammadrazib.hossain@adelaide.edu.au (M.R. Hossain), singh.sanjeet2008@gmail.com (S. Singh), angrishgagan@gmail.com (G.D. Sharma),
simona.apostu@csie.ase.ro (S.-A. Apostu), pbansal711@gmail.com (P. Bansal).

https://doi.org/10.1016/j.enpol.2023.113469
Received 14 October 2022; Received in revised form 19 January 2023; Accepted 26 January 2023
Available online 1 February 2023
0301-4215/© 2023 Elsevier Ltd. All rights reserved.
M.R. Hossain et al.
The expedition is not confined only to the terrestrial landscapes; for
most littoral nations, the expedition has also found its way to the blue
ocean.
The global demand for most petroleum hydrocarbons (i.e., coal, oil,
natural gas) has been increasing unprecedently over the last few years,
except for the COVID-19 pandemic, when the demand went down
sharply (Khanna, 2021), causing a demand shock induced volatility in
the global fossil fuel market (Wan et al., 2021). During this bumpy
roller-coaster ride, many strong economies have witnessed prolonged
recessions, severe unemployment issues (Su et al., 2021), and rapid
decay in the revenue coming from the natural resource trade (Ma et al.,
2021). It has been speculated that the demand for and the supply of
petroleum hydrocarbons are very inelastic, meaning they are less
responsive due to the shock on the price in the short-run (EIA, 2022a).1
Due to the unexpected shock in the price, the oil market loses its steady
state equilibrium and fails to get cleared due to demand and supply
mismatch. Once the consumers adjust to the new prices, the market
starts to get clear. Apart from the demand-supply mismatch, other sig­
nificant factors can breed oil market volatility, changing consumption
patterns and behavior. Geo-political stability is one of the most critical
factors in keeping the oil-market volatility under control (R. Wang et al.,
2021; Zavadska et al., 2020), given that the ruling government controls
oil fields within a specific territory. Apart from this, oil production and
supply decisions from the Organization of the Petroleum Exporting
Countries (OPEC) matter significantly in surpassing a possible
oil-market volatility. Therefore, the petroleum markets can experience
recursive stages, including crude oil price bubbles (A. Khan et al., 2021;
Umar et al., 2021) and the burst of the bubbles, which can reshape the
consumption, extraction, and supply of the fossils in the international
market.
Humans are one of the vital components of our natural environment,
where we share a symbiotic relationship with mother nature (Leviston
et al., 2018). The ecosystem services that we receive from nature are
priceless. However, overexploitation of ecosystem services has posed
severe consequences such as global warming, a physical risk of climate
change. Beginning with the industrial revolution, worldwide industri­
alization and manufacturing of different consumable products bred
millions of metric tons of greenhouse gases (GHGs), including carbon
dioxide (Dong et al., 2019; Mahmood et al., 2020). For instance, ac­
cording to United Nations (2022) climate change report, global GHG
emission in the first half of 2022 was 1.2% higher than during the
pre-pandemic time. In this context, energy consumption, economic
growth, and environmental degradation have become vital issues at
national and international levels. Considering the challenges generated
by climate change worldwide, public authorities and international in­
stitutions are focusing more on finding solutions to minimize the impact
of human activity on the ecosystem. The issue is that the ecosystem has
no physical outlet and cannot communicate and say, “sorry we are out of
stock.” This is on us to decide how much to consume from an ecosystem
and when is the payback time. In this context, nations with an over­
whelming stock of petroleum hydrocarbons have authoritative roles in
controlling global carbon footprint. In this paper, we have introduced
one of these fossil fuel-rich economies and assessed the effects of the
overexploitation of petroleum hydrocarbons on CO2 emissions. To
accomplish this endeavor, we have selected the USA case, given that the
USA is one of the largest producers and consumers of fossil energies (i.e.,
coal, oil, and gas). In terms of the production and consumption of fossil
fuels, the USA outwits most of its rivals. In 2021, the USA’s per capita
consumption of fossils was 63,130 (kWh), which was ten times higher
than what the Indian citizens consumed in 2021 (Our World in Data,
2021). Regarding the production and consumption of natural gas, the
USA is the highest producer and consumer globally (World Population,
2022a). Moreover, in terms of oil production and consumption, the USA
1
EIA stands for U.S. Energy Information Administration.
2
Energy Policy 174 (2023) 113469
is still second to none (Forbes, 2022; World Population Review, 2022).
Additionally, regarding coal production, the USA also makes it to the top
five producers list (Global Data, 2021). Being second to none in the
production and consumption of the highly sought petroleum hydrocar­
bons also means that the USA is approaching the end of its fossil fuel era,
where the speed of depletion has skyrocketed after the COVID-19
pandemic (EIA, 2023). Based on the USA’s emissions history referred
by the US Environmental Protection Agency (EPA, 2020), the trans­
portation sector (27%) is the highest contributor to CO2 emissions,
followed by electricity production (25%). A recent report published by
Bloomberg (2022) claims that around 95% of US vehicles are
non-electric vehicles, verifying the excessive dependence on fossil fuels,
leading to their gradual depletion. Regarding electricity production,
USA’s electricity generation is still heavily dependent on fossil fuels [
fossil: renewables 80:20]. In 2021, the USA produced almost 38%, 22%,
20%, 19%, and 1% of its total electricity from natural gas, coal, re­
newables, nuclear, and other petroleum sources, respectively (EIA,
2021). We have prepared a doughnut chart to portray the statistics in
Fig. 1 below. The production, distribution, and consumption of elec­
tricity, which furthers economic development, incessantly fosters the
depletion of energy sources, unleashing negative consequences on USA’s
environmental sustainability in both the short and long term.
Contemporary scholarship on energy research and environmental
sustainability focusing on the USA is much more diverse than other
developed nations. One of the reasons behind this is that the USA has
constantly been named as one of the top contributors to atmospheric
GHG emissions, regardless of the nation’s staggering technological
forwardness, research and development (R&D), and economic stability.
USA’s emissions-induced cumulative negative impact on the environ­
ment is surging rapidly. In this milieu, the nexus between the USA’s
renewable and non-renewable energy consumption and CO2 emissions
has received substantial attention in the literature (see Ezici et al., 2020;
Pata, 2021; Salari et al., 2021). Moreover, USA’s growth-emissions
nexus has also received sufficient attention from scholars (see Cevik
et al., 2021; Raza et al., 2019; Wang et al., 2018). Additionally, the
Environmental Kuznets Curve (EKC) hypothesis has received ample
attention in the literature; however, the aftermaths are equivocal (see
Alola and Ozturk, 2021; Aslan et al., 2022; Pata, 2021; Sarkodie and
Strezov, 2018). Top polluters like the USA should play leading roles in
limiting climate change, where CO2 emissions reduction needs to be
prioritized, among other actions. In this context, the energy depletion
concept can be a robust instrument to dwindle emissions in the USA.
Large economies like the USA will never be willing to compromise their
economic growth by curtailing their exorbitant dependence on fossils;
however, the nation will undoubtedly agree to make a trade-off between
fossils and renewables (Pew Research Center, 2022). Willingness to
transition from fossils to renewables will mean that the energy depletion
rate has reached its highest peak unless the participating nation does it
voluntarily to save the planet. At this point, failure to accomplish the
transition will mean a downturn in the steady state economic growth
(Batten et al., 2020; Semieniuk et al., 2021), which is the transition risk
of climate change. The transition risk can be avoided with a 100%
transition from fossils to renewables, and to attain that, large fossil fuel
consumers like the USA should keep an eye on the depletion rate and
prepare well ahead of time. In this way, tracking the depletion rate can
be a crucial instrument in controlling physical risks (i.e., environmental
hazards) as well as transition risks of climate change. However, research
in the depletion rate-emissions nexus domain has received scant atten­
tion, and no research focuses on the USA’s context. Therefore, through
this paper, we would like to fill the existing research gap. Why should
the depletion rate-emissions nexus be prioritized in energy research?
The answer lies in the first fundamental theory of thermodynamics,
which relates to the conversion and transition of energy from one place
to another and one form to another. The burning of fossils primarily
generates heat, which is accountable for emissions and global warming.
However, most renewable energies provide work rather than heat and
M.R. Hossain et al.
Fig. 1. Electricity production in the USA from different aggregated sources.
(Source: EIA, 2021)
work as a pro-environmental component (Eyre, 2021). The law of
thermodynamics mostly discusses the inter-conversion of heat and work,
which leads to the energy transition. Energy transition not only means
switching from high carbon-emitting sources but also means switching
from heat-producing sources to work-producing sources (Eyre, 2021).
Therefore, by evaluating the role of energy depletion on the environ­
ment, this paper justifies the rationality of the first law of thermody­
namics, given that energy depletion triggers the need for the energy
transition. The main lesson that can be learned from energy depletion
shock is that nations must adopt energy transition policies before they
run out of fossils. Based on the above-mentioned background, we claim
our novelty as follows: 1) This is the first paper in the literature focusing
on the effects of the energy depletion rate on the USA’s environmental
insecurity. Most of the earlier articles have prescribed that transition
from fossils to renewables can assist in dwindling the atmospheric car­
bon footprint, which is a “one size fits all” type of solution without
further justifications. Against this milieu, the inclusion of the depletion
rate justifies why large economies should aim 100% transition to re­
newables immediately or phase-by-phase. 2) Moreover, in this paper, we
have controlled for variables like renewable energy consumption and
economic growth, which helps unveil how the depletion rate curbs
environmental degradation in the same nexus where we are controlling
the effects of two other crucial variables. 3) Furthermore, this paper
provides a background and justifies the theoretical underpinning and
rationality of the first law of thermodynamics. 4) Additionally, this
paper contributes to the existing literature by incorporating the recently
developed novel dynamic ARDL model (Jordan and Philips, 2018) as our
primary econometric technique, which is not only commodious in pro­
ducing quantitative coefficients by generating shock on the explanatory
variables but also capable in visualizing, simulating and forecasting the
counterfactual effects of the explanatory variables on the dependent
variable. For the computation of the dynamic ARDL model, the “dy­
namic” package in R – software (4.2.2) and STATA (version 15) were
used.
The rest of this paper is structured as follows: Segment 2 briefly
discusses relevant literature in the field, Segment 3 presents the data and
methodology, Segment 4 reveals major results and discussions, and
Segment 5 concludes.
2. Literature review
As discussed above, we have unveiled the dynamic relationship be­
tween CO2 emissions and its selected determinants in the USA. In doing
so, we have evaluated the association between CO2 emissions, depletion
of energy, and depletion of fossil fuels, a highly time-demanding topic in
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Energy Policy 174 (2023) 113469
the context of energy-based literature. We have also controlled for
variables like GDP growth and renewable energy consumption. The
present scholarship reveals substantial evidence that renewables are a
boon for the attainment of both economic and environmental sustain­
ability (Hossain, 2020, 2021; Jahanger et al., 2022, 2023; Magazzino
et al., 2022; Wang et al., 2022) and, therefore, a transition from fossil
fuels to renewables has been touted by environmentalists, energy
economists and policymakers, which is also in line with the Paris
Agreement and the Glasgow Climate Pact. However, 100% transition is
not possible anytime soon due to many unavoidable constraints (i.e.,
technological backwardness, hunger for economic growth), which per­
suades many nations to remain strongly attached to old-school fossil
energies (i.e., coal, gas, oil, and other mineral resources). This over­
exploitation of fossil fuels has led historic energy sources toward the
brink of depletion. It is speculated that these hydrocarbons will be
phased out in the next five to six decades, which gives goosebumps to
many who are not pro-environmentalists and aspire to achieve economic
amelioration by any means. The literature in the domain of energy
research is very comprehensive, containing the findings in the context of
cross-country studies and country-specific studies, detailing the out­
comes of the why’s and how’s of environmental degradation. Fossil
fuel-fed economic development is considered a significant impediment
to the attainment of environmental sustainability in both the developed
West and developing South (Dogan and Ozturk, 2017; Hossain et al.,
2022a; Pata, 2021; Ramzan et al., 2022). Moreover, asymmetries exist
regarding the relationships explored, as some associations have received
wider attention than others. Against this milieu, the CO2
emissions-energy depletion nexus has received the least attention in the
scholarship. We have triumphed in addressing the gaps in the literature
in the following sections.
2.1. CO2 emissions and economic growth
Economic sustainability and environmental sustainability have been
the most discussed concepts in this domain of energy research in the last
two decades, where the primal focus of the researchers has been to find a
solution that degrades the environment as least possible and, at the same
time, does not thwart the ongoing economic development (Barbier,
2009; Charfeddine et al., 2018; Goodland, 1995; Zhang et al., 2021;
Ramzan et al., 2022; Sharma et al., 2021). Down the line, the cumulative
essence of the existing studies is that a trade-off exists in the form of
environmental degradation if we aspire to achieve economic develop­
ment fueled by historic hydrocarbons. Energy conservation strategies
can be helpful; however, the opportunity cost of curtailing fossil fuel
options can be huge for many developing nations. It has been made clear
M.R. Hossain et al.
that the fossil fuel era is not ending soon due to the opportunity cost
issue and the lack of commodious alternatives (Brockway et al., 2019;
Ediger, 2019; Paterson, 2021). There is also an issue with the equitable
management of the termination of fossil fuel usage (Lenferna, 2018),
given that many developed nations (i.e., the USA, Japan) are still heavily
dependent on fossil fuels, let alone the technologically backward
developing and least-developed countries. However, to meet the climate
goals set by the Paris Climate Agreement, Rio Earth Summit, and the last
COP27, we need to dwindle the consumption of fossils by any means
(Erickson et al., 2018; Piggot et al., 2020) and we need to find substitutes
for the fossil energies. GDP growth has been documented as the main
protagonist behind the surge of CO2 emissions in the last few decades
(Hossain et al., 2023), and there is a growing call to decouple economic
growth from CO2 emissions. However, it is also appalling to many that
absolute decoupling is impossible and can hamper economic develop­
ment if executed. For instance, Neves and Marques (2021), in their study
in the USA, noted that the number of alternatives to fossils is still
insufficient in the USA, and a transition from fossils to alternative en­
ergies can bring deleterious effects on USA’s economic growth. More­
over, despite the claim of attaining absolute decoupling followed by
astounding investment in renewables, some nations (i.e., China and
India) are still at the bottom of the ladder in satisfying the emissions
targets (see Wang et al., 2019; Wei et al., 2020). Moreover, the esti­
mations within the Environmental Kuznets Curve (EKC) hypothesis
framework also divulge conflicting outcomes across the cross-country
and country-specific studies, which indicate possible loopholes in the
selection of variables, estimation procedures, and construction of hy­
potheses. Based on our thorough analysis, we unravel that conflicting
observations exist in USA’s EKC hypothesis domain. For instance, Dogan
and Turkekul (2016) and Dogan and Ozturk (2017) failed to validate the
EKC hypothesis in the USA. Contrarily, some other studies unveiled the
presence of the EKC hypothesis in the USA (Alola and Ozturk, 2021;
Aslan et al., 2018; Pata, 2021). Scholars have also reported significant
heterogeneities in the state-level studies focusing on the USA (Işık et al.,
2019a; Isik et al., 2019).
2.2. CO2 emissions and renewable energy consumption
As touted by environmentalists, energy economists, and policy­
makers, renewable energy sources have immense potential to dwindle
the ongoing emissions. Studies in the CO2 emissions-renewables usage
nexus have postulated that due to environmental safety concerns as well
as energy safety issues, we need to choose an energy mix that contains
more renewable energy options compared to its fossil counterparts
(Hashemizadeh et al., 2022; Hossain et al., 2022b; Rehman et al., 2022;
Seriño, 2022; Chopra et al., 2022; J. Zhao et al., 2022). However, we
observed an unprecedented gap between ambition and reality regarding
renewable consumption across different countries. Although the situa­
tion is improving in mitigating the augmented demand-supply mismatch
of energies, the contribution of renewables is still the tip of the iceberg
and needs to be boosted exponentially. It is also true that there are
constraints that can significantly hinder the progress toward the
amelioration of renewable energy development. Investment in techno­
logical advancement and infrastructural development has been identi­
fied as one of the significant barriers to renewable energy penetration
across many nations globally. For instance, Oryani et al. (2021) docu­
mented that lack of investment is one of the significant limitations for
the flourishment of renewable energy development in Iran. Homoge­
nous findings have also been revealed by Appiah-Otoo et al. (2022),
Qadir et al. (2021), and Shahbaz et al. (2021) across many other
developed and developing nations. Among others, keeping up with the
current economic growth is another barrier to ameliorating renewables
as it impedes the positive spillovers of renewable energy sources. Many
unforeseeable events (i.e., the Covid-19 pandemic) can also bolster the
consumption of fossils (Billon et al., 2021; Smith et al., 2021). Moreover,
renewable energy penetration can also support alleviating energy
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Energy Policy 174 (2023) 113469
poverty (X. Zhao et al., 2022), which is why undivided attention to
ameliorating renewable energy sources is required to combat energy
consumption heterogeneity. Studies featuring the USA have also pro­
claimed that renewable energy development can be a boon for the USA’s
environmental and economic sustainability, which is why financial
development in this sector has been advocated by experts (Chen et al.,
2022; Pata et al., 2022). In addition, current literature also claims that
the energy consumption heterogeneity is burgeoning in the USA, as a
new study notes that around 16% of the total citizens in the USA are
energy-poor (Scheier and Kittner, 2022). Therefore, renewable energy
penetration can be a holistic approach toward an inclusive and secure
energy transition.
2.3. Environmental degradation and energy depletion
With the growing demand for energy across the world, energy se­
curity has become one of the major concerns for many nations, showing
us the severity of the dual problem (i.e., meeting environmental integ­
rity on the one hand and ensuring sufficient energy for all on the other)
in the strand of energy research. The overexploitation of ecosystem
services has created hardships for our environment as the natural
environment fails to rekindle its original biocapacity. Contemporary
scholarship in energy research is teeming with the dynamics of re­
lationships between natural resource abundance and environmental
pollution, unraveling both positive and non-positive associations in the
nexus. For instance, Balsalobre-Lorente et al. (2018) highlighted a
negative association between natural resources rent and environmental
degradation among selected European nations from 1985 to 2016. Be­
sides, Zahoor et al. (2022) further unveiled a non-positive association in
the nexus in China. Contrarily, Langnel et al. (2021) disclosed that
natural resource abundance is pernicious for the environment among
the Economic Community of West African States (ECOWAS) member
countries. Bekun et al. (2019) also documented a homogenous positive
association among 16 selected European Union nations. Moreover,
studies have also pointed out heterogeneity in terms of the relationship
in the nexus across different quantiles and countries within a panel (see
Altinoz and Dogan, 2021; Nathaniel, 2021). Thus, it is discernible that
ambiguity exists in the nexus, a concern that needs to be addressed.
However, the most alarming concern about natural resources is that the
stock of non-renewable resources is gradually depleting. This depletion
is irredeemable and has other fatal consequences, which have started to
unfold one by one. The price of fossil energies (i.e., coal, oil, gas) is
skyrocketing every year, posing unavoidable burdens on the nations that
mostly rely on importing non-renewable energies from other countries.
Amid the depletion, resource-rich nations like the USA, Russia, and
Saudi Arabia are earning hefty amounts from the trade of these valuable
resources. Therefore, the depletion of non-renewable energies means
more exploitation of fossils and augmented consumption of fossils,
which can severely jeopardize environmental integrity (Abbasi et al.,
2021a,b; Hussain et al., 2020; I. Khan et al., 2021). Apart from this,
incessant fossil mining can be detrimental to the ecosystem, biodiver­
sity, and the planet as a whole. To thwart the depletion of energy, effi­
cient energy usage must be ensured through sane usage of power,
technological advancement, mitigating the power distribution loss, and
managing sustainable energy storage systems through the development
of batteries. Furthermore, our analysis of the contemporary literature
also divulges that equivocal findings persist in the context of the USA
regarding the natural resource-environmental degradation nexus, where
K. Khan et al. (2021) and Zafar et al. (2019) unraveled negative asso­
ciation and Huang et al. (2021) noted a positive connection.
Overall, our thorough literature review in the context mentioned
above discloses the following gaps in the literature. Firstly, the number
of empirical works portraying the natural resource-CO2 emissions nexus
in the context of the USA is very scant. The USA is a resource-rich nation
where insufficient research in the mentioned domain may lead to
loopholes in policymaking, leading to inaccurate forecasting in resource
M.R. Hossain et al. Energy Policy 174 (2023) 113469

availability, exploitation, and consumption. Secondly, the current
literature is excessively biased, given that it has mostly focused on the
natural resource abundance side and its effect on environmental
degradation, ignoring the depletion of the non-renewable resources and
its consequences on CO2 emissions, at least in the case of the USA, one of
largest producers and consumers of fossil energies of the world. Thirdly,
there is no study so far detailing the extent to which the depletion of
energy can have a moderating impact on the exploitation of renewable
and fossil energy sources on environmental degradation.
3. Data and methodology
3.2. Model specification and modelling approach
The present manuscript analyses the impressions of GDP, ED, RE, and
NRED on CO2 emissions (dependent variable), using the novel dynamic
ARDL simulation method. This methodological approach aims to surpass
the challenges of the conventional ARDL model in examining multifac­
eted parameters in the long and short run. Following Morshed and
Hossain (2022), we have constructed our basic model as follows:
CO2 = f (GDP, ED, RE, NRED) (1)
with intercept and coefficient terms, Eq. (1) can be written as follows:

3.1. Data and their descriptions CO2t = β0 + β1 GDPt + β2 EDt + β3 REt + β4 NREDt + εt (2)

This study examines the relationship between energy depletion (ED),
renewable energy (RE), non-renewable energy depletion (NRED), gross
domestic product (GDP), and carbon dioxide emissions (CO2) in the
USA. The annual time series data from 1980 to 2019 are employed in the
current study to capture the empirical associations between the
explanatory and response variables. We selected this timeframe based
on the availability of data on our designated variables, given that some
variables had missing values prior to 1980. The designated variables
used in this paper have been selected based on the research questions of
this paper. Among the explanatory variables, economic growth has been
captured using the GDP (in constant 2015 US$) data, followed by the
progress in the recent scholarship (see Khan et al., 2022; Mohsin et al.,
2022). We chose GDP to proxy economic growth, given that GDP reflects
an economy’s accurate size and output generation capacity (Harvard
Business Review, 2019). The effect of renewable energy consumption
(RE) is captured by the quantity of renewable energy consumed,
expressed in the British Thermal Unit (BTU). We used this variable fol­
lowed by the progress in the recent scholarship (Ehigiamusoe and
Dogan, 2022; Miao et al., 2022). RE has been selected as it represents the
actual consumption scenario of renewables. Moreover, the energy
depletion rate (ED) has been proxied by the adjusted savings (in current
US$), followed by Abbasi et al. (2021a,b). Adjusted saving has been
chosen to proxy ED as the adjusted savings (% of GNI) is estimated as a
ratio between the available energy stock’s total value and the remaining
reserve lifetime (World Bank, 2023). Additionally, non-renewable en­
ergy depletion (NRED) is used as an interaction term, followed by Abbasi
et al. (2021a,b), taking the non-renewable energy and depletion rate
into account. Finally, we have captured the environmental degradation
using CO2 emissions (in metric tons per capita), followed by Abbasi et al.
(2022), Liu et al. (2022), and others. The data were collected from
multiple sources, including the World Development Indicators (WDI) of
the World Bank (2020), the US Energy Information Administration (EIA,
2020), and Our World in Data (2020). The source and description of the
data are specified in Table 1 below.
Where β0 is the constant and β1 − β4 are the coefficients of independent
variables and εt stands as the white noise error term.
This paper applies a novel dynamic ARDL simulation method to
analyze the dynamic response of a dependent variable caused by
explanatory variables. To accomplish the dynamic ARDL approach, we
have undertaken the following steps:
1. Before proceeding to the empirical modelling, we must check the
stationary properties of our modeled variables, given that statio­
narity is one of the critical attributes of time series. The stationarity
of variables is tested by applying several unit roots tests such as the
augmented Dickey-Fuller (ADF) test (Dickey and Fuller, 1979),
Kwiatkowski–Phillips–Schmidt–Shin (KPSS) (Kwiatkowski et al.,
1992) test, and Philips Perron (PP) test (Phillips and Perron, 1988) at
both level and first differences. For implementing ARDL/DARDL
approach, the dependent variables must be I (1) stationary, where all
of the explanatory variables have to be either level-stationary or
first-difference stationary. The second step involves the selection of
the optimum lag length based on various selection criteria - Schwarz
Information Criteria (SIC), Hannan-Quinn (HQ) Information Criteria,
Akaike Information Criteria (AIC), Adjusted R-squared and Final
Prediction Error (FPE). The ARDL model is specified based on the
selected optimal lag length.
2. After determining the unit root properties and lag order, before
jumping into the estimation of the long and short-term coefficients,
we need to test the presence of a cointegrating relationship between
CO2 emissions and its selected determinants. The long-term cointe­
gration of the unconditional linear corrected model (ULCM) is esti­
mated based on the ARDL model with its different bounds for testing
given by Eq. (3).
ΔCO2t = α0 + λ0 CO2t− 1 + λ1 GDPt− 1 + λ2 EDt− 1 + λ3 REt− 1 + λ4 NREDt− 1
p q1 q2
∑ ∑ ∑
+ αi ΔCO2(t− i) + β1i ΔGDPt− i + β2i ΔEDt−
(3)
i
1 1 1
q3
∑ q4
∑
+ β3i ΔREt− i + β4i ΔNREDt− i + εt
1 1

Where “Δ” divulges the first-difference operator and p denotes the

optimal lag length of CO2 and q1 − q4 denotes the optimal lag lengths of
Table 1 GDP, ED, RE and NRED, respectively. Moreover, λ1 − λ4 and β1 − β4
Source and description of parameters.
stand for the long- and short-term coefficients, respectively. The F-sta­
Sl. Data Description Units of Source tistics bound test is compared with upper and lower fixed critical bounds
No. label measurement to study long-term cointegration between CO2 emissions and its selected
1. GDP Gross Domestic Constant 2015 World Bank determinants. Based on Pesaran et al. (2001) approach the null and
Product US$ (2020) alternative hypotheses are:
2. CO2 Carbon dioxide Metric tons per EIA (2020)
Emissions capita H0 : λ1 = … = λ4 = 0
3. ED Adjusted Savings Current US $ World Bank
Energy Depletion (2020)
H0 : λ 1 ∕
=… ∕
= λ4 ∕
=0
4. RE Renewable Energy Quad BTU EIA (2020)
Consumption The possible results are:
5. NRED Non-Renewable TWH Our World in
Energy Depletion Data (2020)

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M.R. Hossain et al. Energy Policy 174 (2023) 113469

• F-statistics > critical value of upper bound (Long-term cointegration)
• F-statistics < critical value of lower bound (No long-term
cointegration)
• The calculated F-statistic falls within the lower and upper limits (No
conclusive result. However, negative and significant ECM indicates
long -run cointegration)
1. The Error correction model (ECM) is defined as
ΔCO2t = α0 + λ0 CO2(t− + λ1 GDPt− 1 + λ2 EDt− 1 + λ3 REt− 1 + λ4 NREDt−
1)
p
∑ q1
∑ q2
∑
+ αi ΔCO2(t− i) + β1i ΔGDPt− i + β2i ΔEDt−
i
1 1 1
q3
∑ q4
∑ tistics reveal that GDP and CO2 are normally distributed as we fail to
+ β3i ΔREt− i + β4i ΔNREDt− i + ∅1 ECTt− 1 + εt
1 1
The term ECTt− 1 in Eq. (4) indicates the one-lagged error correction
term (ECT). ECT must be negative and significant to adjust any shock in
the short-term towards the long-run equilibrium.
1. Moreover, we have deployed several diagnostic tests to check the
serial autocorrelation, heteroskedasticity, normality of residuals, and
model specification. This step is crucial to represent and testify that
our model is reliable and that the outcomes produced are efficient
and replicable.
Once we are done with the above-mentioned econometric ap­
proaches, we can proceed with our final econometric technique, the
novel dynamic ARDL (DARDL) model (Jordan and Philips, 2018). The
DARDL model can effectively measure both short and long-run co­
efficients from the shocks on the explanatory variables in the model.
This is a simple model to be estimated compared to the conventional
ARDL framework, which poses challenges due to its complex structure.
Moreover, the DARDL method facilitates by producing dynamic coun­
terfactual images of the dynamics of relationships between a dependent
and an independent variable through visual plots. The change in each
regressor and its impact on the response variable can be identified
individually by keeping the effect of other independent variables con­
stant. The DARDL model is given as:
ΔCO2t = α0 + λ0 CO2(t− 1) + λ1 GDPt− 1 + λ2 EDt− 1 + λ3 REt− 1 + λ4 NREDt−
+ β1 ΔGDPt + β2 ΔEDt + β3 ΔREt + β4 ΔNREDt + ∅1 ECTt− 1 + εt
With λi s and βi s are long and short -run coefficients, respectively.
′ ′
depicts the highest mean among the selected variables, and RE depicts
the lowest mean. Besides, the standard deviations across all the chosen
variables are very low, indicating less variability across the data points
over time, which also delineates and cancels out the possibility of out­
liers. From the kurtosis analysis, we unravel that ED and NRED show
heavier tails as the values surpass and stay well above a standard limit
three, whereas other variables have lighter tails as they fail to meet the
standard limit. Regarding the skewness analysis, all the variables are
1
skewed with a left-tail distribution except for RE, which is skewed with a
right-tail distribution. ED has the most extended left-tail distribution
among all the modeled variables. Moreover, the Jarque-Bera test sta­
reject the null of normality. Contrarily, for variables ED, RE, and NRED,
the test statistics are very high, and we can reject the null of normality at
(4) a 5% level of significance.
After our preliminary assessment, we assessed the stationarity status
of our selected variables. We deployed multiple unit root tests to obtain
our research objectives. We have placed the findings in Table 3 below. It
is conspicuous that our chosen variables are non-stationary at the level,
as referred to by the ADF and PP test statistics, except for ED and NRED,
which are stationary at the level at a 5% level of significance. However,
the KPSS test delineates that all our modeled variables are stationary at
the level at 5% significance level, except for NRED. Moreover, after the
first difference, we note that all our variables become stationary under
the PP test. Therefore, we can conclude that all the roots of the modeled
variables lie within the unit circle, as there is no unit root issue. Also, we
confirm a mixed order of integration [I (0) and I (1)] among the vari­
ables. In this milieu, the ARDL model is the best fit to tackle the mixed-
order integration among the variables. Therefore, we have exploited the
advanced novel dynamic ARDL framework to identify the long-term
relationships between CO2 emissions and its selected determinants in
the USA.
After confirming that there is no unit root issue among the variables,
we switch to the lag selection criteria. The findings are displayed in
Table 4 below. We harnessed the AIC, SBIC, and HQIC criteria to select
the appropriate lag for our model. AIC and HQIC criteria select a lag
order of four, whereas SBIC selects a lag order of one. Among these
criteria, SBIC is more useful in selecting a correct model, and AIC is more
appropriate in finding the best model for predicting future observations.
1 Our aim is to choose the most parsimonious model to avoid multi­
collinearity, serial autocorrelation, and misspecification of errors.
(5) Keeping this in mind, we chose the SBIC criterion and selected lag order
one for our empirical model.
We employed the ARDL bounds test to determine the existence of a

long-run cointegrating relationship between CO2 emissions and its

4. Results and discussion selected determinants. The outcomes are posted in Table 5 below. Based
on the estimation, the F-statistic (7.051) is greater than all the upper and
4.1. Descriptive statistics, unit root, lag selection, and cointegration test lower bound values, depicting that we can reject the null hypothesis of
findings no level relationship and endorse that a long-run relationship exists
between CO2 emissions and its selected parameters (ED, GDP, NRED,
At the beginning of our econometric analysis, we conducted a sum­
mary check for all our modeled variables. The results of the same are
summarized in Table 2 below. It is discernible that the obtained mean Table 3
(both minimum and maximum) across all variables is positive. NRED Unit root results.
Variables ADF KPSS PP
Table 2 Level GDP − 1.51 1.09* − 2.84
Summary statistics. ED − 2.49 0.10* − 21.36*
RE − 1.57 0.81* − 3.88
Statistics GDP ED RE NRED CO2
NRED − 2.37 0.09 − 21.08*
Mean 30.16 24.58 1.94 34.54 8.57 CO2 − 0.94 0.58* − 1.28
Standard deviation 0.32 0.60 0.23 0.61 0.09 First Difference Δ GDP − 2.78 0.13 − 23.02*
Min 29.59 22.14 1.64 32.12 8.39 Δ ED − 3.18 0.19 − 40.03*
Max 30.63 25.66 2.44 35.69 8.70 Δ RE − 3.52 0.34 − 37.16*
Skewness − 0.32 − 1.63 1.01 − 1.41 − 0.36 Δ NRED − 3.13 0.15 − 39.77*
Kurtosis − 1.19 5.96 − 0.21 5.09 − 0.67 Δ CO2 − 2.79 0.33 − 31.45*
Jarque-Bera test 3.003 59.62* 6.43* 43.5* 1.724
Note: ‘*’ indicates that p-values significant at 5% significance level, ‘Δ’ repre­
Note: ‘*’ divulges that p-values significant at 5% level of significance. sents the first difference symbol.

6
M.R. Hossain et al. Energy Policy 174 (2023) 113469

Table 4
Lag order selection.
Lag logL LR FPE AIC HQIC SBIC

0 176.486 5e-11 − 9.53 − 9.45 − 9.31

1 391.464 429.96 1.3e-15 − 20.08 − 19.62 − 18.76***
2 405.904 28.882 2.6e-15 − 19.49 − 18.65 − 17.07
3 453.281 94.753 9.5e-16 − 20.74 − 19.51 − 17.22
4 495.074 83.586*** 6.2e-16*** − 21.67*** − 20.06*** − 17.05

Note: “LR” denotes sequential modified LR test statistic, “FPE” refers to final prediction error, “HQIC” is Hannan-Quinn information criterion, SBIC is Schwarz Bayesian
information criterion. “*” divulges lag order selected by each criterion.

Consequently, the USA’s concern is only maintaining the steady-state

Table 5
growth level throughout its fiscal years. To maintain the steady-state
ARDL bound test analysis.
growth level, USA’s economic activities remain highly driven by the
Test statistic value k H0 H1 exploitation and consumption of natural resources, where the extraction
F-stat 7.051*** 4 No level Relationship brings deleterious consequences on environmental sustainability. At the
t-stat − 0.725 relationship exists disaggregated level of natural resource consumption, the USA is still
Critical values
highly dependent on fossil fuels (i.e., petroleum, natural gas, and coal)
Significance F-stat t-stat
level I (0) I (1) I (0) I (1) to escalate its economic performance. According to the US Energy In­
10% 2.66 3.84 − 2.57 − 3.66 formation Administration (EIA, 2022b), in 2021, the USA consumed
5% 3.20 4.54 − 2.86 − 3.99 around 546 million short tons (MMst) of coal, which met 11% of the
1% 4.43 6.25 − 3.43 − 4.60 USA’s total primary demand. It is also notable from the observation of
Note: *** indicates 1% level of significance. EIA that, in 2021, 36% of the total energy supply came from petroleum
hydrocarbons, 32% came from natural gas, and the rest came from nu­
and RE) in the USA. clear and renewable sources (EIA, 2022c). CO2 emissions have the
highest contribution toward the atmospheric greenhouse gas emissions
in the USA, accounting for around 80% of total GHG emissions in the
4.2. Findings of the dynamic ARDL model USA in 2020 (EIA, 2022d). However, a paradigm shift is apparent in the
trend of growth-induced CO2 emissions in the USA as the nation at­
As mentioned earlier, we have exploited the dynamic ARDL (DARDL) tempts to obtain the green growth myth (another American dream),
model to estimate the short and long-term elasticities of the explanatory which falls within the country’s Nationally Determined Contributions
variables in the model. The DARDL model is a modified ARDL model, (NDCs) list to dwindle the CO2 emissions by 2030 and attain net zero
which captures the effect of each regressor on the response variable emissions by 2050. The green growth initiative has escalated the call to
(CO2 in this case), keeping all other variables constant. The DARDL decouple economic growth from fossil fuel, which is perceptible from
framework also cushions the simulations of the modeled explanatory the USA’s latest investment initiative in renewable energy development.
variables and demonstrates the counterfactual mutation, which is a Due to the USA’s green growth initiative, the long-term effect of eco­
robust way of finding the original effect of the model parameters on the nomic growth will be insignificant on CO2 emissions, which the findings
outcome variable. The results of the DARDL model are summarized in of this paper have endorsed. Furthermore, the transition to green growth
Table 6 below. The examined outcome unravels that with all other re­ can boost economic activities in the long-term by creating more job
gressors remaining constant, a 1% boost in the GDP escalates the CO2 facilities in the renewable sectors, corroborated by Georgeson and
emissions by 0.04% in the short-term. Contrary to this positive associ­ Maslin (2019) in the context of the USA.
ation, we find a non-positive association in the nexus in the long-term; Moreover, it is also perceptible that energy depletion is negatively
however, the outcome is statistically insignificant. Regarding the entangled with CO2 emissions in the USA. In other words, a 1% inflation
finding of the short-run effect, our observation is in line with that of in ED dwindles the CO2 emissions by 0.98% and 0.1% in the short and
Ortega-Ruiz et al. (2022), Pata (2021), and Wang et al. (2019), who long-term, respectively. The coefficients are significant at a 5% and 10%
highlighted similar views in the case of the USA. The apparent short-run significance level, respectively. The energy depletion rate indicates the
effect, which is positive, makes sense and can be corroborated in the extreme pressure on ecosystem services coming from natural resource
context of the USA. The US economy is unique regarding its shock ab­ exploitation and consumption. An upsurge in the depletion rate cor­
sorption capacity, size, and percentage share of total global output roborates that consumption of natural resources at both aggregated and
(Focus Economics, 2022), facilitating steady-state economic growth. disaggregated levels has increased within a certain time frame, leading
to a stock of natural resources that is diminishing over time. As the
Table 6 supply of natural resources (i.e., fossils at the aggregated and dis­
Dynamic ARDL simulation outcomes. aggregated levels) becomes limited, we observe less extraction of fossils
Variable Coefficient Std. Error t-values followed by discounted consumption of fossils and other energy options,
which ultimately thwarts the level of CO2 emissions. This negative
Constant 0.021 0.006 3.303 ***
ECTt-1 − 0.32 0.107 − 3.012 *** relationship is also justified because ecosystem services take time to
GDPt-1 − 0.011 0.009 − 1.18 restore to their earlier capacities, where overexploitation impedes the
Δ GDPt-1 0.044 0.01 4.454 *** recovery rate significantly. For instance, it took millions of years for
EDt-1 − 0.093 0.049 − 1.89 * these fossil energies to be produced, which the USA and other nations
Δ EDt-1 − 0.985 0.459 − 2.144**
REt-1 − 0.014 0.006 − 2.29 **
have been consuming, and once finished, it is unclear when new sources
Δ REt-1 0.0006 0.001 0.59 will evolve. Therefore, this relationship in the nexus of ED-CO2 emis­
NREDt-1 0.0950 0.054 1.749* sions calls for immediate actions to rely more on renewable energy
Δ NREDt-1 0.988 0.44 2.243** sources and to keep untapped what is left of the fossils, at least for the
(adj) R2 0.699 F-stat (p-value) 10.81(<0.001) **
oncoming generations. Our observation is in line with that of Abbasi
Note: ***, ** and * represent 1%, 5% and 10% level of significance, respectively, et al. (2021a,b) in Thailand.
“Δ” indicates the short-run elasticities.

7
M.R. Hossain et al. Energy Policy 174 (2023) 113469

Additionally, we discovered that renewable energy consumption consumption basket and divert the consumption toward more sustain­
shares a non-positive relationship with CO2 emissions in the USA in the able fuel options like renewables and nuclear energies. Our findings are
long-term. Put it differently, a 1% upsurge in renewables consumption also in line with Abbasi et al. (2021a,b) in the case of Thailand.
thwarts environmental degradation by 0.01% in the long-term, whereas Table 6 also delineates that the error correction term (ECT) is
the short-run effect is insignificant. This finding is interesting and aligns negative and highly significant at a 1% significance level. The coefficient
with USA’s green growth agenda. The consumption of renewables also of ECT (− 0.32) unravels that our model attains its long-run equilibrium
indirectly means the consumption of electricity from renewable sources. at a speed of adjustment of 32%/year. The adjusted- R squared value is
Due to its geophysical attributes and geographical structure, the USA 0.7, which depicts that the explanatory variables of our model can
holds immense potential to generate renewable electricity that can explain almost 70% of the total variation in the dependent variable.
significantly motivate the nation’s green growth directory. Based on the
EIA’s latest observation on the progress of the USA’s renewable goals, in
4.3. Visualization of the counterfactual changes
2021, the nation managed to produce around 20% of its total electricity
from renewable sources (EIA, 2022e), commendable progress amid the
We used the DARDL model for an additional benefit that the con­
Covid-19 pandemic. However, abatement of coal consumption has been
ventional ARDL model fails to accommodate. The DARDL model assists
USA’s main challenge towards the transition to renewables, given that
in visualizing, estimating, forecasting, and predicting the counterfactual
coal is cheap and readily available in the USA. Against this backdrop, the
changes in the dependent variable coming from the shock on selected
Biden administration in the USA aspires to produce 100% clean elec­
regressors. The DARDL simulations automatically plot the forecasts of
tricity by 2035 (The Washington Post, 2020), which can fade away due
actual regressor change and their effect on the dependent variable while
to excessive dependence on fossils. The global energy crisis, the
keeping other explanatory variables constant. The counterfactual sim­
COVID-19 pandemic, the Russian invasion of Ukraine, and other un­
ulations captured by the dynamic ARDL model are portrayed in the
certainties have led many nations to depend more on fossils, and the
figures below. The black dots refer to the average prediction values, and
USA is one of them, where post-pandemic coal consumption is
the dark blue to light blue lines refer to 70%, 90%, and 95% confidence
increasing rapidly (Bloomberg, 2021). Therefore, to keep up with
intervals, respectively. Fig. 2 below portrays the response of CO2
president Biden’s ambitious climate goals and Paris Agreement, the
emissions due to a 10% positive and negative shock on GDP in the USA.
USA, at this stage, needs a boost in its renewable investment plan, which
It is apparent from Fig. 2 that a positive 10% change in GDP tends to
can foster the shutdown of coal-fired power stations and will also curtail
plunge the CO2 emissions in both the short and long-term; however, the
the depletion of energy. The finding of this paper is homogenous to that
long-term effect is more extreme compared to the short-term impact.
of Pata (2021), Saidi and Omri (2020), Sharif et al. (2019), and Yu et al.
Contrarily, a 10% negative shock on GDP escalates the CO2 emissions in
(2022). Furthermore, the depletion of non-renewable energy (NRED) is
the long-term, as depicted in Fig. 2 below. Moreover, Fig. 3 illustrates
positively connected with CO2 emissions in the USA. In other words, a
the change in CO2 emissions due to the shock in ED. It is conspicuous
1% rise in NRED escalates the CO2 emissions by 0.09% and 0.9% in the
that a 10% positive change in ED dwindles the CO2 emissions in the
long and short-term, respectively. The findings are significant at 10%
long-term, whereas there is no momentous change in the short-term.
and 5% significance levels, respectively. The depletion of non-renewable
Conversely, a 10% negative shock in ED generates no meaningful dif­
energy sources mostly represents the over-exploitation of fossils at both
ference in CO2 emissions in the short-term; however, we unveil pro­
aggregated and disaggregated levels. In the case of the USA, the current
longed escalation in the emissions history in the long-term.
exploitation of natural resources and fossils, generation of fossil-based
The response to CO2 emissions due to the positive and negative
electricity, and over-exploitation of ecosystem services are in harmony
shocks on RE has been captured in Fig. 4. It is discernible that a 10%
with our findings. Our observation also delineates that the USA is the
positive shock on RE dwindles the CO2 emissions in the short and long-
sole consumer of its extracted fossils (i.e., coal, gas, and oil), given that
term, whereas a 10% negative shock on RE boosts the CO2 emissions in
the depletion augments USA’s environmental pollution in the short and
the short and long-term. Similarly, the response to CO2 emissions due to
long-term. Therefore, we propose that the USA diversify its energy
the positive and non-positive shocks on NRED has been captured in

Fig. 2. Impulse response plot of GDP on CO2 emissions.

8
M.R. Hossain et al. Energy Policy 174 (2023) 113469

Fig. 3. Impulse response plot of ED on CO2 emissions.

Fig. 4. Impulse response plot of RE on CO2 emissions.

Fig. 5. Impulse response plot of NRED on CO2 emissions.

9
M.R. Hossain et al.
Fig. 5 below. It is perceptible that a positive 10% change does not
generate any remarkable shift in the CO2 emissions history in the short-
term. However, CO2 emissions soar in the long-term. Conversely, a 10%
negative change in NRED dwindles the CO2 emissions in the long-term
in the USA, whereas the short-term change is very flimsy.
We conducted a few relevant diagnostic tests to check the stability
and robustness of our empirical model. The diagnostic test outcomes are
aligned in Table 7 above. It is evident from the results that our model is
free from any serial autocorrelation, as suggested by the Breusch-
Godfrey LM test. The Breusch-Pagan-Godfrey test also corroborates
that our model is free from heteroskedasticity issues. Moreover, the
Ramsey RESET test divulges that our model is correctly specified, and
there is no omitted variable bias issue. Furthermore, the Shapiro-Wilk
Test for Normality delineates that the residuals are normally distributed.
5. Conclusion and policy implications
Through this paper, we endeavored to establish a dynamic link be­
tween the breach of environmental integrity, depletion of energy, and
depletion of non-renewable energy sources in the USA, while controlling
for economic growth and renewable energy consumption. The USA is
one of the world’s largest economies, where the overall economic system
primarily relies on historical fossil fuels, the main protagonist behind
global warming. It is cumbersome for many nations to switch from
fossils to other alternative energy options that have been touted as clean
and environmentally friendly. However, for a top polluter like the USA,
the transition needs to be made for the sake of the global environment,
which requires that policymakers, thinktanks, and researchers unveil
the why’s and the how’s of the transition that can ensure the most
positive spillover for the environment and least negative spillover for the
economic sustainability. To achieve this research objective, we have
introduced the negative consequences of the overexploitation of
ecosystem services within a nexus of renewable energy development and
economic growth. Hence, this paper evaluates the pattern of the rela­
tionship between CO2 emissions, ED, RE, GDP, and NRED, using the
time-series data from 1980 to 2019. We endeavored to unearth the
consequences of the energy depletion on environmental integrity in the
USA, which remained uncharted for a long time, while we controlled for
the effects of the variables like GDP, and RE. We deployed a series of
econometric techniques to generate reliable and replicable outcomes.
The final modelling has been accomplished by deploying the novel
DARDL model due to its superiority over the conventional ARDL
method.
The findings of our paper depict that economic activities and growth
hypothesis pose deleterious effects on the USA’s environmental sus­
tainability only in the short-term. The impact of renewable energy
consumption is non-negative in the long-term, as expected, indicating
that consumption of renewable energies can be a boon for the USA’s
long-term environmental goals. The effect of ED, the main variable of
interest in this paper, is negative on CO2 emissions in both the short and
long-term. Finally, the impression of the interaction term between non-
renewable energy use and depletion rate (NRED) is found to be non-
negative in both the short and long-term. Moreover, this paper makes
the following contribution to the existing literature. 1) By unveiling the
dynamic relationship in the energy depletion-CO2 emissions nexus, this
paper points out the rationality of why the USA and other top emitters
should allocate more time, effort, and financial assistance in the energy
conversion and transition process, which is deemed to be the best
strategy toward the attainment of net-zero emissions target by 2050.2)
The findings of this paper concur with the theoretical underpinnings of
thermodynamics by providing the rationality of the inter-conversion of
heat to work, where the former degrades environmental integrity, and
the latter ameliorates environmental health. 3) The findings of this
paper also delineate that energy depletion can be shocking; however, it
unleashes new trajectories to find alternatives to fossils in the long-term.
In this milieu, this study suggests that policymakers as front liners invest
10
Energy Policy 174 (2023) 113469
Table 7
Diagnostic test results.
Tests Test p- Test result
stat values
Breusch-Godfrey LM 0.34 0.559 No Evidence of serial
autocorrelation
Breusch-Pagan-Godfrey 0.00 0.99 No evidence of
heteroskedasticity
Ramsey RESET test 1.37 0.267 Model specified correctly
Shapiro-Wilk Test for 0.981 0.738 Residuals are normally
Normality distributed
more time in generating workhorse models that can mitigate the crisis of
energy depletion, which will materialize as the historic fossil fuels get
depleted in the next five to six decades.
The overall findings of this paper unravel that, being a top CO2
emitter of the world, this is high time that the USA focuses more on
sustainable energy options, which can be a boon for the USA’s economic
and environmental sustainability. The energy diversification strategy
needs to be more policy-oriented, where the USA’s focus should be on
the transition process to renewables. The current depletion rate of the
fossils is alarming, and for many nations like the USA, which are highly
dependent on fossils, this is a desperate time. A high depletion rate also
indicates that the USA’s economic sustainability will face severe issues
in the long-term, which is highly reliant on the incessant supply of
fossils. Therefore, at this point, higher authorities in the USA should
focus more on the 100% transition to renewable energies. However, at
the same time, it is also important that the country makes judicious
decisions regarding the transition so that it receives the least negative
impact on its economic activities. The transition process has to be
balanced, adjusted, and phase-by-phase depending on the overall eco­
nomic condition. Moreover, the Biden administration needs to invest
more in R&D to equip the nation’s renewable industry with better
environment-friendly technologies to curb ongoing emissions. Overall,
we suggest that the policymakers of the USA make a trade-off between
fossil fuel and renewable energy options, depending on the overall status
of the US economy. The ratio between the former and the latter should
be less than one to keep the warming level below the desired limit. We
claim that our study is novel; however, it also has some limitations. We
could not accommodate a large sample size due to the unavailability of
data. Besides, we had to exclude a few parameters due to their missing
values. Therefore, future studies can be conducted using additional
control variables if data availability approves that. Moreover, a panel
data study based on the same sets of variables is highly encouraged,
comprising the top emitters of the world.
CRediT authorship contribution statement
Mohammad Razib Hossain: Data curation, Writing – original draft.
Sanjeet Singh: Methodology, Software. Gagan Deep Sharma:
Conceptualization, Writing – review & editingWriting- Reviewing and
Editing. Simona-Andreea Apostu: Software, Validation. Pooja Bansal:
Visualization, Investigation.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Data availability
Data will be made available on request.
M.R. Hossain et al. Energy Policy 174 (2023) 113469

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