USA carbon neutrality target: Evaluating the role of environmentally adjusted multifactor productivity growth in limiting carbon emissions

One of the most vital strategies to achieve sustainable development is to target green growth, which is pollution adjusted output growth rate. Since green growth addresses both economic performance and environmental sustainability, it is necessary for sustainable development. To gauge the environmental impact of increased output, researchers use conventional measure of output growth. However, these measures are not adjusted for pollution and hence, do not reflect the true growth performance of the economy. For this purpose, this study aims to investigate the role of green growth in limiting carbon emissions in the USA for the period of 1990-2019. The authors further examine the role of globalization and renewable energy consumption in affecting CO₂ emissions of USA. The results show that in the long run, green growth, output, renewable energies, and globalization are important factors in affecting CO₂ emissions of USA. The results of frequency causality test show that there is unidirectional causal relationship from output renewable energy consumption, green growth, and globalization to CO₂ emissions in the long run and medium run. This study suggests interesting policies for achieving targets of carbon neutrality. There is a dire need to take instant actions to control climate change and to mitigate greenhouse gases (GHGs). To achieve the target of carbon neutrality, a downward adjustment of economic growth is necessary, which will help the country to abate the pollution emissions.