Citation

Sahu, Pritish Kumar and Solarin, Sakiru Adebola and Al-Mulali, Usama and Ozturk, Ilhan (2022) Investigating the asymmetry effects of crude oil price on renewable energy consumption in the United States. Environmental Science and Pollution Research, 29. pp. 817-827. ISSN 0944-1344, 1614-7499

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Abstract

The reduction in oil prices might make crude oil a cheaper alternative to renewable energy (RE). Given this, the present paper examines the effect of fluctuation of oil prices on the use of RE in the United States (US) during the period 1970 to 2018. We constructed two nonlinear autoregressive distributed lag (NARDL) models to examine the effect of the positive and negative oil price shocks on the use of RE in the US. The RE consumption is taken as the dependent variable and the gross domestic product (GDP), Brent crude prices, population density, trade openness, and price index as independent variables. The result revealed that the rise in crude oil price, GDP, and population density will increase RE use in the short run and in the long run as well. Moreover, the study finds that any decrease in oil prices will decrease RE use in the short run and its effect will eventually diminish in the long run. On the policy front, it is suggested that US should raise its energy security by reducing its dependency on imported crude oil and increase the role of RE through the imposition of taxes on oil and increase the base of production and consumption through a series of measures.

Item Type:	Article
Uncontrolled Keywords:	Oil prices, Renewable energy, GDP, Gross domestic product
Subjects:	H Social Sciences > HC Economic History and Conditions > HC79 Special Topics. Including air pollution, automation, consumer demand, famines, flow of funds, etc.
Divisions:	Faculty of Business (FOB)
Depositing User:	Ms Nurul Iqtiani Ahmad
Date Deposited:	30 Aug 2021 09:53
Last Modified:	27 Jan 2022 15:12
URII:	http://shdl.mmu.edu.my/id/eprint/9462

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