Abstract
Does renewable energy displace fossil fuels? Recent research finds mixed evidence, highlighting that effects are heterogeneous across contexts. I further explore this question by examining whether renewable energy production displaces fossil fuel production in the 33 fossil fuel–producing states in the U.S. from 1997 to 2020. Using three different approaches (two-way fixed effects regression, half-panel jackknife two-way fixed-effects regression, and the half-panel jackknife test for Granger causality), I find robust evidence that there is not an association between renewable energy production and fossil fuel production at the U.S. state-level. Additional analyses suggest that 96.7% of the variation in fossil fuel production is explained by state fixed effects, indicating that time-invariant state characteristics are much more important to consider.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Explore related subjects
Discover the latest articles and news from researchers in related subjects, suggested using machine learning.Data availability
The data and code are available upon request.
Notes
Based on the EPA’s (2021) level 1 ecoregions, all or parts of Colorado, Iowa, Illinois, Kansas, Louisiana, Minnesota, Missouri, Montana, North Dakota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Wisconsin, and Wyoming are in the Great Plains region. Louisiana is also a major fossil fuel producer, but I exclude them here because only the southwestern part of the state is considered part of the Great Plains. The state also has lower wind potential compared to others in the region.
An important difference between fossil fuels and renewables, like solar and wind, is that efficiency improvements in their extraction do not speed up their rate of depletion. However, solar and wind do face a limitation in that humans cannot control how windy or sunny it is, whereas there is a definitive resource supply of fossil fuels.
The focus on the subnational level also aligns with recent calls to focus on scales closer to extraction sites (Theis et al. 2024).
The xthpj command (Thombs 2023) used to implement the half-panel jackknife fixed effects estimator requires balanced data at the time of writing this article. If an unbalanced panel were allowed, Idaho and Washington state would be included because they have several years of producing fossil fuels. In additional analyses, I estimated unbalanced two-way fixed effects regressions, and the findings were substantively the same.
The models are kept parsimonious to limit M-bias and overcontrol bias (Cinelli et al. 2024). In a sensitivity analysis available upon request, I also control for League of Conservation Voters (LCV) score for each state, which is a commonly used indicator of state-level environmentalism (Dietz et al. 2015; League of Conservation Voters 2020; Thombs 2022). The results are substantively the same, and the LCV score was not associated with fossil fuel production. Other potential time-invariant drivers, such as fossil fuel endowment and renewable energy potential, are controlled for by the state fixed effects.
Following a long tradition in the global environmental change literature (York et al. 2003; Jorgenson and Clark 2012; Rosa and Dietz 2012; Jorgenson et al. 2023), I use natural logarithms so that the coefficients can be interpreted as percentage changes, and the data is more likely to be normally distributed and homoscedastic.
In a sensitivity analysis, total fossil fuel production was regressed on total renewable energy production and the findings were substantively the same. Population, which was added as an independent variable, was not statistically significant.
sumhdfe produces summary and diagnostic statistics on regressions using fixed effects. The percentage of the variation in fossil fuel production explained by the state fixed effects is based on the R2.
References
Apergis N, Payne JE, Menyah K, Wolde-Rufael Y (2010) On the causal dynamics between emissions, nuclear energy, renewable energy, and economic growth. Ecol Econ 69(11):2255–2260. https://doi.org/10.1016/j.ecolecon.2010.06.014
BEA (2022) GDP by State. https://www.bea.gov/data/gdp/gdp-state. Accessed 28 Aug 2022
BLS (2023) BLS data finder. https://www.bls.gov/data/. Accessed 20 Jan 2023
Bourcet C (2020) Empirical determinants of renewable energy deployment: a systematic literature review. Energy Economics 85:104563. https://doi.org/10.1016/j.eneco.2019.104563
Bunker SG (1989) Staples, links, and poles in the construction of regional development theories. Sociol Forum 4(4):589–610
Carley S, Davies LL, Spence DB, Zirogiannis N (2018) Empirical evaluation of the stringency and design of renewable portfolio standards. Nat Energy 3(9):754. https://doi.org/10.1038/s41560-018-0202-4
Chudik A, Pesaran MH, Yang J-C (2018) Half-panel jackknife fixed-effects estimation of linear panels with weakly exogenous regressors. J Appl Economet 33(6):816–836. https://doi.org/10.1002/jae.2623
Cinelli C, Forney A, Pearl J (2024) A crash course in good and bad controls. Sociol Methods Res 53(3):1071–1104. https://doi.org/10.1177/00491241221099552
Correia S, deHaan E, de Kok T (2021) Sumhdfe. https://github.com/ed-dehaan/sumhdfe
Crago CL, Koegler E (2018) Drivers of growth in commercial-scale solar PV capacity. Energy Policy 120:481–491. https://doi.org/10.1016/j.enpol.2018.05.047
Dhaene G, Jochmans K (2015) Split-panel jackknife estimation of fixed-effect models. Rev Econ Stud 82(3):991–1030. https://doi.org/10.1093/restud/rdv007
Dietz T, Frank KA, Whitley CT, Kelly J, Kelly R (2015) Political influences on greenhouse gas emissions from US states. PNAS :201417806. https://doi.org/10.1073/pnas.1417806112
Dorrell J, Lee K (2020) The politics of wind: a state level analysis of political party impact on wind energy development in the United States. Energy Res Soc Sci 69:101602. https://doi.org/10.1016/j.erss.2020.101602
Dumitrescu E-I, Hurlin C (2012) Testing for Granger non-causality in heterogeneous panels. Econ Model 29(4):1450–1460. https://doi.org/10.1016/j.econmod.2012.02.014
EIA (2024) Total Energy Production 2022. https://www.eia.gov/international/rankings/world?pa=12&u=0&f=A&v=none&y=01%2F01%2F2022. Accessed 28 Oct 2024
Granger CWJ (1969) Investigating causal relations by econometric models and cross-spectral methods. Econometrica 37(3):424–438. https://doi.org/10.2307/1912791
Greiner PT, York R, McGee JA (2018) Snakes in the greenhouse: does increased natural gas use reduce carbon dioxide emissions from coal consumption? Energy Res Soc Sci 38:53–57. https://doi.org/10.1016/j.erss.2018.02.001
Haberl H, Wiedenhofer D, Virág D, Kalt G, Plank B, Brockway P, Fishman T, Hausknost D, Krausmann F, Leon-Gruchalski B, Mayer A, Pichler M, Schaffartzik A, Sousa T, Streeck J, Creutzig F (2020) A systematic review of the evidence on decoupling of GDP, resource use and GHG emissions, part II: synthesizing the insights. Environ Res Lett 15(6):065003. https://doi.org/10.1088/1748-9326/ab842a
Holtz-Eakin D, Newey W, Rosen HS (1988) Estimating vector autoregressions with panel data. Econometrica 56(6):1371–1395. https://doi.org/10.2307/1913103
Huang X (2024) The multidimensional relationship between renewable energy deployment and carbon dioxide emissions in high-income nations. npj Clim Action 3(1):1–17. https://doi.org/10.1038/s44168-024-00191-5
International Energy Agency (2021) World Energy Investment 2021
IPCC (2021) Climate Change 2021: The Physical Science Basis.
Jenkins JD, Mayfield EN, Farbes J, Jones R, Patankar N, Xu Q, Schivley G (2022) Preliminary report: the climate and energy impacts of the inflation reduction Act of 2022. REPEAT Project, Princeton, NJ. https://doi.org/10.5281/zenodo.6992940
Jorgenson AK, Clark B (2012) Are the economy and the environment decoupling? A comparative international study, 1960–2005. Am J Sociol 118(1):1–44. https://doi.org/10.1086/665990
Jorgenson AK, Clark B, Thombs RP, Kentor J, Givens JE, Huang X, El Tinay H, Auerbach D, Mahutga MC (2023) Guns versus climate: how militarization amplifies the effect of economic growth on carbon emissions. Am Sociol Rev 88(3):418–453. https://doi.org/10.1177/00031224231169790
Juodis A, Karavias Y, Sarafidis V (2021) A homogeneous approach to testing for Granger non-causality in heterogeneous panels. Empir Econ 60(1):93–112. https://doi.org/10.1007/s00181-020-01970-9
League of Conservation Voters (2020) national environmental scorecard. In: League of Conservation Voters Scorecard. https://scorecard.lcv.org/scorecard/archive. Accessed 5 Oct 2020
Liddle B, Sadorsky P (2017) How much does increasing non-fossil fuels in electricity generation reduce carbon dioxide emissions? Appl Energy 197:212–221. https://doi.org/10.1016/j.apenergy.2017.04.025
Lyon TP (2016) Drivers and impacts of renewable portfolio standards. Annual Review of Resource Economics 8(1):141–155. https://doi.org/10.1146/annurev-resource-100815-095432
Magdoff F, Foster JB (2011) What every environmentalist needs to know about capitalism: a citizen’s guide to capitalism and the environment. Monthly Review Press, New York
O’Shaughnessy E, Wiser R, Hoen B, Rand J, Elmallah S (2022) Drivers and energy justice implications of renewable energy project siting in the United States. J Environ Pol Plan 1–15. https://doi.org/10.1080/1523908X.2022.2099365
Obama B (2017) The irreversible momentum of clean energy. Science 355(6321):126–129. https://doi.org/10.1126/science.aam6284
Rosa EA, Dietz T (2012) Human drivers of national greenhouse-gas emissions. Nat Clim Chang 2(8):581–586. https://doi.org/10.1038/nclimate1506
Shafiei S, Salim RA (2014) Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: a comparative analysis. Energy Policy 66:547–556. https://doi.org/10.1016/j.enpol.2013.10.064
Theis N, Betancourt M, Sikirica A (2024) Appraising sociological approaches to ecologically unequal exchange: theoretical considerations and quantitative consequences. J World-Syst Res 30(2):610–634. https://doi.org/10.5195/jwsr.2024.1253
Thombs RP (2017) The paradoxical relationship between renewable energy and economic growth: a cross-national panel study, 1990–2013. J World Syst Res 23(2):540–564. https://doi.org/10.5195/JWSR.2017.711
Thombs RP (2018) Has the relationship between non-fossil fuel energy sources and CO2 emissions changed over time? A cross-national study, 2000–2013. Clim Change 148(4):481–490. https://doi.org/10.1007/s10584-018-2215-1
Thombs RP (2022) The asymmetric effects of fossil fuel dependency on the carbon intensity of well-being: A U.S. state-level analysis, 1999–2017. Glob Environ Change 77:102605. https://doi.org/10.1016/j.gloenvcha.2022.102605
Thombs RP, Jorgenson AK (2020) The political economy of renewable portfolio standards in the United States. Energy Res Soc Sci 62:101379. https://doi.org/10.1016/j.erss.2019.101379
Thombs R (2023) xthpj
US EPA (2021) Ecoregions. https://www.epa.gov/eco-research/ecoregions. Accessed 26 Aug 2021
Xiao J, Karavias Y, Juodis A, Sarafidis V, Ditzen J (2023) Improved tests for Granger noncausality in panel data. The Stata Journal 23(1):230–242
York R (2012) Do alternative energy sources displace fossil fuels? Nat Clim Chang 2(6):441–443. https://doi.org/10.1038/nclimate1451
York R (2017) Why petroleum did not save the whales. Socius 3:2378023117739217. https://doi.org/10.1177/2378023117739217
York R, Bell SE (2019) Energy transitions or additions?: Why a transition from fossil fuels requires more than the growth of renewable energy. Energy Res Soc Sci 51:40–43. https://doi.org/10.1016/j.erss.2019.01.008
York R, McGee JA (2017) Does renewable energy development decouple economic growth from CO2 emissions? Socius 3:2378023116689098. https://doi.org/10.1177/2378023116689098
York R, Rosa EA, Dietz T (2003) Footprints on the Earth: the environmental consequences of modernity. Am Sociol Rev 68(2):279–300. https://doi.org/10.2307/1519769
Acknowledgements
I would like to thank Andrew Jorgenson, Juliet Schor, and Sarah Babb for helpful feedback and comments on the manuscript.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Competing interests
The author declares no competing interests.
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Thombs, R.P. Does renewable energy production displace fossil fuel production in the U.S.? A panel data study of fossil fuel–producing U.S. states, 1997–2020. J Environ Stud Sci (2025). https://doi.org/10.1007/s13412-025-01013-8
Accepted:
Published:
DOI: https://doi.org/10.1007/s13412-025-01013-8