Revisiting the relationship between business conditions, climate policy uncertainty, and environmental pollution: evidence from the USA

• Published in: Environmental science and pollution research international 2023-09, Vol.30 (41), p.94334-94346
• Main Authors: Yousfi, Mohamed, Brahim, Mariem, Farhani, Sahbi, Bouzgarrou, Houssam
• Format: Article
• Language: English
• Subjects: Aquatic Pollution; Atmospheric Protection/Air Quality Control/Air Pollution; Carbon dioxide; Carbon dioxide emissions; Climate policy; Continuous wavelet transform; COVID-19; Earth and Environmental Science; Economic conditions; Economic development; Economic growth; Economics; Ecotoxicology; Emissions; Emissions control; Environment; Environmental Chemistry; Environmental Health; Environmental policy; Environmental protection; Pollution; Public policy; Research Article; Uncertainty; Waste Water Technology; Water Management; Water Pollution Control; Wavelet transforms
• ISSN: 1614-7499; 0944-1344; 1614-7499
• DOI: 10.1007/s11356-023-28869-z

This paper aims to revisit the interdependency between business conditions, climate policy change, and the environmental pollution of the USA. Interestingly, our paper represents a completion to the existing literature on three levels at least. First, we propose to analyze this issue during normal periods and periods of turmoil, particularly the COVID-19 outbreak. To do so, contrary to previous studies that used economic growth, we employ the ADS index as a real-time business conditions measurement. Second, we employ a frequency approach, based on the continuous wavelet transform, allowing us to understand the nature of the relationship. Understanding whether the relationship holds in the short- or long-term is useful for policymakers in monitoring public policies to achieve CO 2 emission reduction as well as to investors interested in high value-added projects. Our analysis shows that, during the last two decades, the relationship between business conditions as well as climate uncertainty index and CO 2 emissions is observed during the long- and short-term, and driven through economic conditions. However, during the crisis periods, the effect is detected across various scales and the relationship is bi-directional. Our results have several practical implications for the US policymakers to consider when setting policies for fighting pollution emissions and environmental protection.