Time-Varying Impacts of Monetary Policy and Socio-Economic Factors on China’s CO 2 Emissions and Ecological Footprint: A Multi-Methodological Analysis

Yu Tang (), Iftikhar Yasin and Khaliq ul Rehman
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Yu Tang: School of Economics, Jilin University, Changchun 130021, China
Iftikhar Yasin: Department of Government & Public Policy, Faculty of Contemporary Studies, National Defence University, Islamabad 44000, Pakistan
Khaliq ul Rehman: Department of Accountancy, SKANS School of Accountancy, Islamabad 44000, Pakistan

Sustainability, 2024, vol. 16, issue 24, 1-26

Abstract: This research explores the least explored domain concerning the impact of monetary tactics on carbon dioxide emissions in China, thereby adding depth to environmental economics. The analysis spans 1982–2022 and explores the interplay between monetary instruments, ecological footprint, CO 2 emissions, and factors like human capital, GDP per capita, remittances, urbanization, and fossil fuel dependence. The investigation utilizes a multifaceted approach, including wavelet analysis techniques, like wavelet power spectrum, wavelet coherence analysis, quantile on quantile, and quantile regression. The findings unveil critical insights. The results demonstrate that monetary policy has had differing effects on emissions depending on the time. Contractionary policies are good for lowering medium- and long-term emissions, even if they cause a short-term increase in emissions. Furthermore, the study emphasizes the beneficial impact of human capital development on CO 2 emissions. Fossil fuels, per capita income, and population significantly contribute to environmental damage beyond monetary policy. This research contributes original insights by integrating monetary policy and socio-economic factors in a comprehensive, multi-methodological framework, offering valuable guidance for crafting policies that balance economic growth with environmental sustainability.

Keywords: ecological footprint; CO 2 emissions; monetary policy; wavelet coherence; power spectrum; environmental sustainability; quantile regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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