Determinants of CO 2 Emission: Evidence from United States

: The decline in environmental quality can be marked by an increase in the earth's temperature or what we call global warming. Global warming can be caused by increasing concentrations of greenhouse gas (GHG) emissions on earth, one of the most important components of which is CO 2 emissions. This study aims to determine the effect of economic growth, energy consumption, forest area and urbanization on CO 2 emissions in United States in the period 1970-2020. This study uses a Vector Error Correction Model (VECM) analysis model. The results of the study indicate that economic growth, energy consumption, and foreign direct investment have a significant effect on CO 2 emissions in the long term.


Introduction
The Fourth Assessment Report of the United Nations Intergovernmental Panel on Climate Change IPCC estimates that global average temperatures will increase by 2 to 4.2 degrees Celsius by 2100. Judging from the reports published by the IPCC, it appears that CO 2 emissions are a shock to human survival which will affect human life both in terms of health, food, and the economy (Dila, 2021). Half of global greenhouse gases come from ten countries in the world listed by the World Research Institute (WRI). This is supported by data from Our World in Data which also shows that the United States is the highest emitter of CO 2 (see figure 1). The amount of emission produced is 24.5%. This number is very high when compared to other countries. China only produces 13.9%. Meanwhile, the other countries shown in Figure 1 only produce CO 2 emissions below 7%. And this becomes a question, why is the United States which is included in the category of developed countries but actually produces the largest emissions. In theory, developed countries should actually be able to produce low gas emissions compared to developing countries which are currently focusing on industrial development.
The growth of carbon dioxide emissions in the United States tends to increase, but starting in 2010 it has decreased until 2018. Where in 2018 the CO 2 emissions produced were quite low compared to the previous twenty years (see chart 1). Even though it started to fall in 2018, the United States is still the world's highest contributor of gas emissions. For this reason, this study is interested in analyzing how CO 2 emissions are determined in the US. One form that affects the level of CO 2 emissions is the level of economic growth in a country. Economic growth is one measure of a country's economic performance. Economic growth looks at how economic activities affect the income growth of the population of a region in a certain period of time. This economic growth also shows an increase in the standard of living of the community which is marked by an increase in the income of the community as a whole. Economic growth is connected with community economic activities which are also related to the population that continues to increase in every year (Indraswari, 2016).
Economic development to increase economic growth is associated with the exploitation of both natural resources and the environment. If exploitation continues, it is feared that it will result in environmental damage. One of the consequences of environmental damage is climate change due to the influence of greenhouse gases. an increase in the greenhouse effect, where climate change can occur due to this. In addition, energy use or energy consumption can also be a cause of climate change because economic development activities are also closely related to energy use (Arista & Amar, 2019).
The success of a country can be seen from how the country is able to build its economic growth. To see if the country is experiencing economic growth, it can be seen from whether the country's economic activities are able to affect the income growth of its people in a certain period of time. Sufficient quantities of large goods and services can better meet the needs of households, businesses, and the government, so it can be said that the country is experiencing economic growth (Zuldareva, 2017).
According to Candra (2018) that CO 2 emissions cause high global temperatures so that they also affect climate change. Industrial growth as a driver of economic growth is the source of the current global warming and environmental quality problems (Candra, 2018). This is in line with A'yun and Khasanah (2022) which explained that the relationship between environmental quality and economic growth is closely related. There is a positive correlation on economic growth to environmental quality.
The following studies of Govindaraju and Tang (2013) and Yazdi and Dariani (2019) also explored that there is an effect of economic growth to CO 2 . Beside that Ghosh (2010) explained that there is two way relationship between economic growth and CO 2 emission in the short run. Other studies also gave similar results that GDP growth have an effect to CO 2 emissions (Farhani et al., 2014;Ertugrul et al., 2016;A'yun & Khasanah, 2022). Different study from Zaidi (2017) explained that GDP growth reduce the CO 2 emissions. But Kalmaz and Ayobamiji (2020) explained that GDP growth and energy will increasse the CO 2 emissions.  1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004  The Fourth Assessment Report of the United Nations Intergovernmental Panel on Climate Change IPCC estimates that global average temperatures will increase by 2 to 4.2 degrees Celsius by 2100. Judging from the reports published by the IPCC, it appears that CO 2 emissions are a shock to human survival . which will affect human life both in terms of health, food, and the economy (Dila, 2021). Most experts have linked the root causes of global warming to the rapid global economic growth, the consumption of large amounts of human energy, and the greenhouse effect of the emission of six gases that affect the earth's climate change.
Thus, the contribution of this study is to explore empirically the factors that influence CO 2 emissions in the United States, here in after referred to as the determinants of CO 2 emissions, such as economic growth, energy consumption, and foreign investment using data obtained from the World Bank, British Petroleum and Our World in data in the form of time series data. The novelty of this study is that it specifically discusses carbon dioxide (CO 2 ) in United States. There have been limited studies regarding carbon dioxide (CO 2 ) in United States. Other studies discuss the environmental quality index which does not discuss further details.

Research Method
The type of research used in this research is quantitative research. The type of investigation used is influence research, where the type of quantitative research aims to determine the influence between variables so that they can perform analysis in the short term to the long term. The subject of this study is a country with a high level of CO 2 emission, namely the United States. Time series is the time dimension used in this study which was conducted in the United States from 1970 to 2020. This study collects related variables in the publication information of the World Bank, British Petroleum, and Our World in Data from 1970 to 2020. Collection techniques the data used is a documentation technique, namely by collecting or conducting data searches, which come from the results of annual survey publications whose collection is carried out periodically by the World Bank, British Petroleum, and Our World in Data. To analyze the causal relationship between economic growth, energy consumption, and foreign investment using the VECM (Vector Error Correction Model) method. Mathematically, the VECM equation is written as follows: Where CO 2 is CO 2 emissions, EG is economic growth, EC is energy consumption, and FDI is foreign direct investment.

Result and Discussion
According to Zuldareva (2017) CO 2 emissions have a clear relationship with gross domestic product. Then, around 1850, about 70% of total energy generation emissions came from North America and Europe with the rest produced by agricultural countries. Developing countries will start doing building construction in the future as a picture of an increasing population and increasing economy. There is a tendency to find that an increase in local wages will affect financial development which will lead to an increase in emissions. The Kuznet curve continues to show that as individual incomes begin to increase, the climate will improve and the utility of small uses will decrease. So, at the same time, energy use causes high CO 2 emissions and is driven by financial development caused by energy use.   The slowdown in economic growth can be caused by various factors such as sudden economic shocks, excessive debt, excessive inflation, excessive deflation, technological changes, and others. In 2020, Indonesia, China and the United States will experience a decline in economic growth due to the Covid-19 pandemic, which will not only have an impact on the health crisis but will also affect the economic US; 4.432 -1.000 2.000 3.000 4.000 5.000 6.000 7.000 The high energy consumption is caused by the increasing demand for energy. This happens because energy is needed for the operation of the industrial sector as a driver of the economy. Energy is an input resource that supports and enhances other inputs to undergo various processes to produce outputs. As a natural resource, energy must be utilized optimally for the welfare of the community and its management must be based on the principles of sustainable development. Environmentally sound development is the foundation for achieving sustainable development (Zuldareva, 2017). One of the causes of the decline in energy consumption is because offices implement the "Work from Home" policy, various industries limit their activities due to falling demand for their products, declining economic activity and increasingly stringent Covid-19 containment policies, resulting in a significant reduction.  1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008  There is disagreement as to the reasons for the CO2 expansion, with the most controversial factor being the effect of foreign speculation and monetary developments on CO2. According to Tang, (2017) foreign speculation affects monetary developments and energy utilization. Monetary developments and foreign speculation strongly influence the release of CO2. There is also another assessment by Tang, (2017), that monetary developments and foreign speculation adversely affect CO2 release, and it implies that foreign ventures and financial developments increase CO2 emissions. This assessment is corroborated by their examination, according to the side effects of Zhang and Zhou (2016) exploration in China from 1995 to 2010, foreign investment added to the reduction of CO2 emissions. Table 1 shows that all mean values in this study are positive, therefore, this study has high variability.  Table 3, it is known that the optimal lag test produces lag with the criteria of FPE, AIC, SC, and HQ. It is recommended that the lag used is lag 4, because seen from the lowest AIC value and the asterisks are mostly in lag 4. Cointegration test was carried out using the Johansen Cointegration method and obtained a trace statistic value > from the critical value of 5% so that 3 cointegration relationships were obtained, as well as the Max Eigen Statistic value > compared to the critical value of 5%, indicating that there were 3 cointegration relationships. So it can be concluded that there is a stable relationship in the long term between variables. With the cointegration in this equation and the observed variables are stationary at the first difference stage, the next method can use the VECM model.

Determinants of CO2 Emission: Evidence from United States
Journal of Economics Research and Social Sciences, 2023 | 184  Table 5, it can be seen that the models used are stable because the average value of the modulus is less than one. Therefore, it can be said that the results of further tests on the analysis of IRF (Impluse Response Function) and VDC (Variance Decomposition) can be said to be valid.  Table 6 explain that in the causality test it is known that X1, X2, and X3 are not causally related to CO 2 emissions (Y) and vice versa, where the probability value is greater than 0.05 so that the variables do not have a two-way causal relationship.  Table 7 shows that the variables X1 and X2 passed the a priori test while the X3 variable did not pass the long-term a priori test. In Table 7 the results of VECM can be seen that economic growth (X1), energy consumption (X2) and foreign investment (X3) have a long-term relationship with CO 2 emissions when the t-statistic is greater than the t-table value.  Table 8 shows that the variables X1, X2, and X3 did not pass the short-term a priori test. Based on Table 8, it can be seen that the variables of economic growth (X1), energy consumption (X2), and foreign investment (X3) do not have a short-term relationship to CO 2 emissions because the t-Statistic value has a smaller value than the t- Table. Based on Figure 10 the response of the CO 2 emission variable is positive from period one to period ten except for the third period. The response of the CO 2 emission to economic growth is positive and negative from period one to period ten. The response of the CO 2 emission to energy consumption is positive and negative from period one to period ten. The response of the CO 2 emission to foreign direct investment is positive and negative from period one to period ten.
Economic growth variable responds positively and negatively from period one to period ten to the CO 2 emission variable. The economic growth variable responds positively from period one to period ten to itself except in the second period. Economic growth variable responds positively and negatively to energy consumption variable. The economic growth variable responded positively and negatively from ten periods to the foreign investment variable.

Determinants of CO2 Emission: Evidence from United States
Journal of Economics Research and Social Sciences, 2023 | 186 Energy consumption variable responds positively and negatively from ten periods to the CO 2 emission variable. The response of the energy consumption variable to economic growth is positive and negative from ten periods. The response of the energy consumption variable to itself is positive and negative from ten periods. The response of the energy consumption variable to foreign investment is positive and negative from period one to period ten. The foreign investment variable responds positively from period one to period ten to the CO 2 emission variable. The foreign investment variable responded positively from period one to period ten to the variable economic growth. The foreign investment variable responds positively and negatively from period one to period ten to the energy consumption variable. The response of the foreign investment variable to itself is positive from period one to period ten except in period four. Figure 11 shows that in the first period, CO 2 (Y) emissions are strongly affected by themselves by 100%. Furthermore, in the first period, the variables of economic growth (X1), energy consumption (X2), and foreign investment (X3) have not affected CO 2 emissions (Y). Furthermore, CO 2 emissions decreased in proportion from the first period of 100,0000 to the tenth period to 89,04308. The second position is foreign investment (X3) which has an increase of 0.000000 in period one to 3.940159 in period ten. The third position is energy consumption (X2) where in period one it is 0.000000 to 3.671380 in period ten. Then the last position is the economic growth variable (X1) which has a VD value of 0.000000 in period one and then increases to 3.345382 in period ten.

Figure 11 Variance Decomposition Test
In this study, it was found that economic growth has a long-term relationship and affects CO 2 emissions positively and significantly with a t-statistic value of 5.47979, where the tstatistic value is greater than the t-table value, which is 2.022896, so that the long-term economic growth variable affects CO 2 emissions are in accordance with the research hypothesis. Although the initial hypothesis or assumption of economic growth does not have a short-term relationship and does not affect CO 2 emissions, this is supported by the t-statistic value which is smaller than the t-table value of 2.022896, so that the variable economic growth does not have a short-term impact on CO 2 emissions. From this it can be concluded that in the long term there is an influence of the independent variable on the dependent variable. The Environmental Kuznets curve, or EKC theory, which explains that the magnitude of environmental damage will increase with increasing economic growth, but beyond a certain point the amount of environmental damage will decrease as economic growth increases when it has passed a turning point, while in the short term this is not proven in this study in brief. because CO 2 emissions are a form of global pollution that is expected to increase or decrease in the long term. The results of this study also show that there is a positive and significant effect of long-term economic growth variables on CO 2 emissions. This could be because economic growth has not yet passed the turning point, which occurs because at the initial scale the economy will continue to increase to pursue economic growth targets and increase people's incomes. The results of this study are also in line with research conducted by Baffoe-Bonnie and Mensah (2018), Vo et al. (2019), Islam et al. (2017), G.C. and Adhikari (2021), Thongrawd and Kerdpitak (2020), Ho (2018), Arista and Amar (2019), and Tang (2017) which state that economic growth has a relationship and positively affects CO 2 emissions.
The results of this study, found that energy consumption has a long-term relationship and affects CO 2 emissions positively and significantly with a t-statistic value of 5.13944, where the t-statistic value is greater than the t-table value, which is 2.022896, so that the variable energy consumption in the long term affect CO 2 emissions according to the research hypothesis. Although the initial hypothesis or assumption of economic growth does not have a short-term relationship and does not affect CO 2 emissions, this is supported by the t-statistic value which is smaller than the t-table value of 2.022896, so that the energy consumption variable has no short-term impact on CO 2 emissions. One part that affects monetary progress is how much energy is widely used, such as the increasing use of energy in the industrialization cycle. The demand for energy in the production industry to run machines must be very high. Then again, support for energy commitments, especially in trade or export receipts and government revenues, which are used in the method of collecting development capital. The results of this study are also in line with research conducted by Baffoe-Bonnie and Mensah (2018) In this study, it was found that there was a long-term relationship indicating that the foreign investment variable had a significant negative effect on carbon emissions with a t-statistic value of -2.83942 which was greater than the t-Table value of 2.012896 in line with the research hypothesis. While the initial hypothesis or assumption of the foreign investment variable on short-term CO 2 emissions is not proven, this is evident from the tstatistic value which is smaller than the t-table value, so that the foreign investment variable has no impact on CO 2 emissions in the short term. Long-term results show that foreign investment has a negative and significant effect on CO 2 emissions, meaning that if foreign investment increases by 1%, CO 2 emissions will decrease by -2.83942 million tons. Foreign investors will basically build an industry based on the up-to-date technology to reduce the level of negative externalities as low as possible for the sustainability of the industry in the long term. The results of this study are also in line with research conducted by Tang (2017) which states that foreign investment has an effect on CO 2 emissions.

Conclusion
Based on the VECM results, the economic growth variable (X1) in the short term is not significant with CO 2 emissions, while in the long term the economic growth variable has a

Determinants of CO2 Emission: Evidence from United States
Journal of Economics Research and Social Sciences, 2023 | 189 significant positive relationship with CO 2 emissions so that it is in accordance with the hypothesis. Therefore, economic growth has a significant positive effect on CO 2 emissions in the long term. Furthermore, the energy consumption variable has no relationship with CO 2 emissions in the short term but has a significant positive effect in the long term. This means that the energy consumption variable is in accordance with the hypothesis. Therefore, there is an effect of energy consumption with CO 2 emissions. Furthermore, the foreign investment variable in the short term is not significant to CO 2 emissions, but the foreign investment variable has a significant negative relationship to CO 2 emissions in the long term. This is in line with the hypothesis made. Therefore, it can be concluded that foreign investment affects CO 2 emissions.
As a developed country, the US government should immediately take action. This study gives the result that economic growth has a positive effect on CO 2 emissions, the higher the economic growth, the higher the CO 2 emissions. Thus the US government needs to make efforts to improve environmental quality. As a developed country and the largest economy, what we do will have a big impact on the world. The US government should immediately be firm and concerned about carrying out development using environmentally friendly products.