The spillover impacts of urbanization and energy usage on CO2 emissions: A regional analysis in the United States

Abstract

This study endeavors to identify how urbanization and energy factors (use, prices, and policies) have influenced CO2 emission patterns per capita among the 48 U.S. states and the District of Columbia from 2000 to 2015. To examine interconnections between state-level emissions, three different spatial panel data models are estimated: the spatial autoregressive model, spatial error model, and the spatial Durbin model models. This study makes contributions to the literature by applying a spatial panel data approach and including policies on urbanization and renewable standards. Urbanization is found to have a statistically significant, negative direct effect on emissions, yet a negative spillover effect such that a 1.0% increase in state i's urbanization level leads to a 0.30% decrease in its own state's emissions, but a 0.012% increase in an adjacent state j's emissions. Although state-level emissions are increased by higher energy use and coal consumption, both energy prices and renewable portfolio standards decrease emissions both within their own and adjacent states.