Disaggregated renewable energy sources in mitigating CO2 emissions: new evidence from the USA using quantile regressions.

A key objective of renewable energy development in the USA is to reduce CO2 emissions by decreasing reliance on fossil fuels in the coming decades. Using quantile-on-quantile regressions, this research examines the relationship between disaggregated sources of renewable energy (biomass, biofuel, geothermal, hydroelectric, solar, wind, wood, and waste) and CO2 emissions in the USA during the period from 1995 to 2017. Our findings support the deployment of various types of renewables in combating CO2 emissions for each quantile. In particular, a negative effect of renewable energy consumption on CO2 emissions is observed for the lower quantiles in almost all types of renewables. The effect of all the renewable energy sources taken together is significant for the lower and upper quantiles of the provisional distribution of CO2 emissions. The effect of renewable energy becomes stronger and more significant in the middle quantiles, where a pronounced causal effect of return and volatility is detected for the lower and upper middle quantiles. At the same time, heterogeneity in the findings across various types of renewable energy sources reveals differences in the relative importance of each type within the energy sector taken as a whole. Future US initiatives in renewable energy deployment at both the federal and the state levels should take into consideration the relative importance of each type, so as to maximize the efficacy of renewable energy policies in combating CO2 emissions.