Decarbonization efforts under the energy and climate policy uncertainties: a comparison between the USA and China

Climate change is a major socio-economic issue that is intensively occupying the global policy agenda. Countries are developing various strategies to combat climate change as part of the sustainable development goals (SDGs). Recently, uncertainties in climate and energy policies have led to a debate among researchers, and the impact of these uncertainties on the achievement of the SDGs is just beginning to be discussed. In this context, this study is the first to comparatively analyze the impact of energy policy uncertainty (ENPU) and climate policy uncertainty (CLPU) on daily carbon emissions and renewable electricity production (REP) for China and the USA. To this end, the study applies novel multivariate quantile-on-quantile regression cross-quantilogram approaches on daily data between January 1, 2019, and September 30, 2022. The results of the study indicate that: (i) CLPU causes a decrease in REP and, on the contrary, upsurges carbon emissions in both the USA and China. (ii) ENPU augments carbon emissions in the USA and China. (iii) ENPU decreases REP in China, but ENPU increases REP in the USA for quarterly and annual periods. These findings show that uncertainties in climate and energy policies hinder the achievement of SDG-7 clean energy and SDG-13 climate action targets. In this context, policymakers should establish policies that eliminate energy and climate-related uncertainties and implement consistent energy and climate policies to promote renewable energy and combat climate change.