Asymmetric role of environmental policy stringency, fiscal, and monetary policy on environmental sustainability: Evidence from BRICS-T countries

Climate change is often discussed and serves as an essential topic among policymakers and researchers. This study aims to examine the impact of macroeconomic policy and "environmental policy stringency" (EPS) on "ecological footprint" (EF) and "load capacity factor" (LCF) for the BRICS-T (Brazil, Russia, India, China, South Africa, and Turkey) countries using annual data from 1990 to 2022. It also explores other environmental sustainability factors, such as economic growth and disintegrated energy. This investigation utilizes second-generation approaches such as Westerlund cointegration, "method of moments quantile regression" (MMQR), and panel causality test. Furthermore, a robustness check is done using long-run estimators, such as dynamic ordinary least square (DOLS), fully modified ordinary least square (FMOLS), and fixed effect ordinary least square (FE-OLS). Overall, findings from the method of moments quantile regression (MMQR) test concerning EF suggest that economic growth and fiscal policy contribute to environmental quality. Meanwhile, monetary policy, renewable energy consumption, and environmental policy stringency mitigate the pollution level in all quantiles. Moreover, results from the LCF model indicate that monetary policy, environmental policy stringency, and renewable energy consumption improve the environmental condition. However, fiscal policy has damaged environmental pollution in each quantile. In addition, the study findings confirm the validity of the inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis and U-shaped LCC hypothesis. The long-run estimators support the outcomes from the MMQR method. The empirical findings of the DH panel heterogeneous causality test confirm the presence of bidirectional and unidirectional causality between the model parameters, underscoring that policy interventions such as government expenditure, money supply, and EPS significantly impact environmental quality and vice versa. Thus, the study recommends allocating more funds for eco-friendly technology, initiating a green lending program, and enforcing stringent environmental laws and regulations to attain Sustainable Development Goals.