Modeling the dependence structure of CO2 emissions and energy consumption based on the Archimedean copula approach: the case of the United States

In this paper, we aimed to investigate the relationship between energy consumption and carbon dioxide (CO2) emission quantities. To explain the dependence structure, we employed asymmetric Archimedean copulas and determined the best fitting multi-parameter Archimedean copula based on the lambda-function. A goodness-of-fit improvement can be obtained by using concordance invariant and tail dependence preserving transforms. The association of CO2 emission quantities and energy consumption is characterized by the transformed convex sum of the Gumbel and Clayton copula, indicating evidence of joint extreme occurrences when both of the variables increase or decrease in the industrial sector. Also, the Kendall hazard scenario approach was used to evaluate the probability of extreme events. The results provide valuable information for researchers who model changes in CO2 emission quantities with energy consumption.