Abstract
Although there have been international frameworks for limiting global warming, however, sustainable actions are not on the same track in terms of speed and scale due to the lack of an explicit pathway. A large strand of the literature has examined the emissions-mitigating effect of R&D expenditure and biofuel energy consumption but in a linear framework and disregarded the factors that cause non-linearity. In that respect, this study aims to offer a new perspective on the asymmetric response of greenhouse gas emissions to government energy R&D expenditure and biofuel use in the United States over the 1981–2020 period using a nonlinear time series approach. The results confirm the asymmetrical relationships between government energy R&D, biofuel use, and greenhouse gas emissions. In the long run, a positive shock in energy R&D expenditure reduces greenhouse gas emissions, while a negative shock increases them. More importantly, the reducing effect of positive shock is more dominant than the enhancing effect of negative shock in energy R&D. Similarly, it is shown that the reducing effect of a positive shock on ethanol consumption on greenhouse gas emissions is stronger than the increasing effect of a negative shock. After the estimations, this paper presents two critical implications, political and practical. (i) The government's energy R&D expenditures and biofuels have an important role in the fight against climate change and the clean energy transformation process. (ii) Researchers should also consider asymmetric effects when examining energy technologies, renewable energy, and environmental issues.
•Examines the greenhouse gas emissions response to government energy R&D expenditures and bioethanol consumption in the US.•Follows an asymmetric and non-linear method.•Confirms the asymmetrical relationships between energy R&D, bioethanol, and greenhouse gas emissions.•Provides implications for environmental quality and the clean energy transition.