Long-Term US Economic Growth and the Carbon Dioxide Emissions Nexus: A Wavelet-Based Approach

Creative Commons License

TORUN E., Akdeniz A. D. A., DEMİRELİ E., Grima S.

SUSTAINABILITY, vol.14, no.17, 2022 (SCI-Expanded, SSCI, Scopus) identifier identifier

  • Publication Type: Article / Article
  • Volume: 14 Issue: 17
  • Publication Date: 2022
  • Doi Number: 10.3390/su141710566
  • Journal Name: SUSTAINABILITY
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Aerospace Database, CAB Abstracts, Communication Abstracts, Food Science & Technology Abstracts, Geobase, INSPEC, Metadex, Veterinary Science Database, Directory of Open Access Journals, Civil Engineering Abstracts
  • Keywords: CO2 emissions, economic growth, continuous wavelet transform, causality
  • Open Archive Collection: AVESIS Open Access Collection
  • Dokuz Eylül University Affiliated: Yes

Abstract

Economic growth has significantly boomed carbon emissions in the global economy. However, there is an ongoing debate about the economic growth-carbon emission nexus for various economies in the literature. This paper investigates the short/long-term causal information flow between fossil-fuel-related carbon dioxide emissions (CO2) and economic growth (GDP) in the US economy spanning from 1800 to 2014. Using wavelet-based-nonparametric Granger causality analysis, the empirical results indicate that (i) the long-run causal information flow running from GDP to CO2 is positive, strong, uninterrupted and concentrated since the 1990s; (ii) the reverse causality is positive but interrupted, short-term and intensifying during the early 1990s. Due to strong and very long-term unidirectional causality findings, economic growth leads to environmental deterioration. Hence, for policymakers, environment-based growth policies and structural reforms can foreshadow energy-efficient policies by limiting carbon emissions. Hence, sustainable economic growth policies are expected to decelerate environmental problems and promote environmental sustainability. The findings can be attractive for other booming economies.