Macroeconomic uncertainty’s real-time shocks on U.S. fossil fuels and renewable energy

Given the backdrop of growing economic volatility and the U.S. energy transition, understanding how macroeconomic uncertainty affects energy production and consumption is increasingly critical. Thus, this study explores the time-varying effects of macroeconomic uncertainty on U.S. fossil fuel and renewable energy production/consumption using four core uncertainty indicators. The empirical results reveal three key findings. First, macroeconomic uncertainty has significant time-varying effects on energy production/consumption. For instance, USEPU began driving fluctuations in fossil fuel production after 2020, while ESG uncertainty has persistently affected renewable energy production/consumption since September 2020. Second, structural disparities exist between energy types. Fossil fuels are resilient to most short-term shocks, whereas renewables are sensitive to all four uncertainty indicators. Third, the WSI and WUI complement the USEPU and ESG criteria by capturing global sentiment and systemic risk, filling the gap in the literature regarding overreliance on economic policy uncertainty indicators. This study provides a novel perspective for understanding the dynamic response of energy markets to macroeconomic uncertainty and offers implications for formulating resilient energy policies.