Author(s)

NIYAZI BERK, SELIN SARILI, DINA CAKMUR YILDIRTAN

Abstract

This study explores how key economic and structural variables affect CO₂ emissions over time, with a focus on sustainability and renewable energy use. Using monthly U.S. data from February 2001 to February 2025, we apply a time-varying parameter VAR connectedness model to capture dynamic relationships. Variables are selected to reflect a comprehensive view of economic activity, energy use and sustainability factors. These include: CO₂ emissions from energy consumption, fossil energy consumption, renewable energy consumption, crude oil prices, unemployment rate, retail sales, consumer price index and industrial production index. Results show that fossil fuel consumption and CO₂ emissions are strongly interconnected. CO₂ emissions data, broken down by energy source, serve as the primary dependent variable. During major crises – such as the 2008 financial crash and the 2020 pandemic – the influence of economic shocks on emissions increased sharply. These findings highlight the need for adaptable climate policies that account for changing macroeconomic conditions.

Keywords

carbon dioxide emission, renewable energy, economic growth, TVP-VAR