How do pandemic uncertainty and carbon dioxide emissions influence the nexus between energy consumption and economic growth? The case of U.S. Available to Purchase

The outbreak of the COVID-19 pandemic has affected numerous countries worldwide, among which the U.S. is the leading country. Meanwhile, the U.S. has the world’s second-highest primary energy consumption, and the country is still heavily reliant on petroleum and natural gas that emit greenhouse gases such as carbon dioxide (CO₂) during combustion. This study examines the direct and indirect effects of pandemic uncertainty and CO₂ emissions on the nexus between energy consumption and gross domestic product (GDP) by employing discrete threshold estimation. Besides investigating the net or total asymmetric effects of energy consumption, this research includes four sectoral datasets in the model estimations, which are residential, commercial, industrial, and transportation. The period covered is 1996–2021, using quarterly data. The estimation results report an asymmetric relationship between energy consumption and GDP triggered by pandemic uncertainty and CO₂ emissions. Yet, these asymmetric effects are small compared to the influences of GDP lag(s) and CO₂ emissions. In addition, the pandemic uncertainty discloses a direct positive impact besides the indirect effect on the GDP. It is most likely due to the rebound effects. Total and sectoral CO₂ emissions also have consequences on GDP directly and indirectly, where the direct impacts vary across regimes. The observable asymmetric effects of energy consumption, CO₂ emissions, and the preceding economic situations could deliver more informative insights to the U.S. local government and policymakers.