Asymmetric impact of natural resources rent, monetary and fiscal policies on environmental sustainability in BRICS countries

Abstract

Climatic variation is a frequently focused discussion among policymakers and academicians. In this regard, the current study yields a distinctive viewpoint in exploring the determinants of environmental sustainability, considering macroeconomic policies, natural resources rent, renewable energy consumption, and economic growth for BRICS economies. It uses annual data from 1990 to 2019 and investigates the asymmetric impact of the association between variables. In doing so, the Method of Moment Quantile Regression (MMQR) is applied, and the behavior of estimates is observed at several conditional quantiles of the carbon emissions. The results suggest that natural resource rent, fiscal policy expansion, and economic growth are sources of increasing emissions in the BRICS region. The effect of these variables grows at lower quantiles and lessens at higher quantiles. In contrast, renewable energy consumption and contractionary monetary policies reduce emissions at major quantiles. These results are also endorsed by the augmented mean group and common correlated effect mean group estimators and offers valuable policy implications.