Impact of economic policy uncertainty on <scp>CO₂</scp> emissions in the <scp>US</scp>: Evidence from bootstrap <scp>ARDL</scp> approach

Environmental degradation, global warming, and climate change have become eminent risk factors posing a serious threat to global security. One of the reasons behind those risk factors is greenhouse gases (GHGs) that are mainly consisted of carbon dioxide (CO 2 ) emissions. Previous studies try to discern the economic and noneconomic determinants of CO 2 emissions to impede environmental degradation. However, the impact of economic policy uncertainty (EPU) on CO 2 emissions remains largely understudied. To address this gap, this study examines the impact of EPU on CO 2 emissions in the US using a novel methodology of bootstrap ARDL approach that allows for discerning heterogeneity in the impacts between the short run and the long run. The results indicate that EPU intensifies CO 2 emissions in short run, suggesting that high EPU is responsible for environmental degradation in the short run. Conversely, in long run, EPU plunges CO 2 emissions, implying that high EPU ameliorates environmental quality in the long run. Such evidence on trade‐off between EPU and CO 2 emissions implies that policymakers should adopt measures to reduce EPU in the short run to improve environmental quality. In long run, if policymakers seek to simultaneously control EPU and CO 2 emissions, they should search for alternate ways (e.g., renewable energy consumption) to mitigate CO 2 .

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