Does Biomass Energy Consumption Reduce Total Energy CO2 Emissions in the U.S.

Abstract This study investigates the causal relationship between total biomass energy consumption, total energy CO2 emissions, and GDP in the United States for the period January 1973 − December 2016 by employing a directed acyclic graph (DAG) techniques and the Autoregressive Distributed Lag (ARDL) model. Additionally, this paper examines the existence of the environmental Kuznets curve (EKC) hypothesis. The result of the DAG reveals that total biomass energy consumption and GDP have a unidirectional contemporaneous causal relationship with total energy CO2 emissions. Based on the results of the ARDL, we find that a 1% increase in per capita total biomass energy consumption causes a 0.65% reduction in per capita total energy CO2 emissions in the long-run. This finding implies that expanding the usage of biomass is one way to reduce and control greenhouse gases in the U.S. Moreover, we find that the inverted U-shaped EKC hypothesis is satisfied for the U.S. case. Findings from this study suggest that energy policies should stimulate an increase of biomass production for reducing total energy CO2.