Transition to Renewable Energy Production in the United States: The Role of Monetary, Fiscal, and Trade Policy Uncertainty

Abstract

Renewable energy has emerged as a key to attain higher economic growth without any detrimental impact on the environment. Therefore, the entire world is in the transition phase from non-renewables to renewables. To improve the levels of production of renewable energy, it is inevitable to discern its determinants. Hence, this study aims to probe the impact of monetary, fiscal, and trade policy uncertainty on renewable energy production in the United States. To this end, the novel smooth and sharp structural breaks unit root test is used to scrutinize the order of integration. Next, we also apply the novel augmented autoregressive distributed lag methodology for discerning cointegration. The findings note that, in the long- and short-run, monetary policy uncertainty plunges the production of renewable energy, whereas fiscal policy uncertainty upsurges it. Further, trade policy uncertainty does not affect renewable energy production. Based on these results, we propose policy suggestions that could expedite the transition to renewables.

Clarifying the nexus between Trade Policy Uncertainty, Economic Policy Uncertainty, FDI and Renewable Energy Demand

“…The neutral effects of TPU on REC in the USA have been established in the study of (Jamil et al, 2022). According to the study findings, fiscal policy uncertainty enhances renewable energy production; monetary policy uncertainty does the opposite in the short and long run.…”

“…More precisely, renewable energy consumption in China and India would be reduced by 1.331% and 0.8455% in the long run and by 0.855% and 0.556% in the short run due to a 10% change in TPU. The recent study which has supported the adverse connection between TPU and REC is implemented by, however, the conflicting findings in terms of literature offered by (Jamil et al, 2022).…”

Influencing factors of green energy transition: The role of economic policy uncertainty, technology innovation, and ecological governance in China

“…However, EPU adversely affects the green transformation mechanism in the long run by enhancing the systematic risks in the green investment Frontiers in Environmental Science frontiersin.org portfolios (Ivanovski & Marinucci, 2021). The studies on the nexus between EPU and GET are scant (Jamil et al, 2022;Zhou et al, 2022), as the existing literature has paid more attention to green energy investment under the economic policy uncertainty (Pirgaip & Dinçergök, 2020;Lei et al, 2022) and less on the renewable energy association with EPU. Therefore, this study reviews the literature on the nexus of green or renewable energy consumption (GEC) and economic policy uncertainty to shed light on both positive and negative associations.…”

“…Thus, the technological transformation and capital investment in the green energy sector support the integration of GET in high EPU. From the green energy production (GEP) perspective, Jamil et al (2022) investigated the individual impact of EPU in terms of monetary, fiscal, and trade policy uncertainties on GEP in the USA. The ARDL method results showed that the monetary policy uncertainty dropped the GEP, while the fiscal policy uncertainty upsurged the GEP.…”

The Impact of the Polish Renewable Energy Sector on Employment

“…These documents constitute an integral part of the strategy developed by the European Commission to implement the UN 2030 Agenda for Sustainable Development (Organization, 2015). Ambitious plans to foster the development and application of renewable energy are also being implemented at the national level, by the three largest GHG emitters: China (Auffhammer et al, 2021), the USA (Jamil et al, 2022), and India (International, 2020). In Poland, the production of energy from renewable sources between 2000 and 2020 more than tripled from 3,808 ktoe to 12,518 ktoe.…”