Time-Varying Impacts of Monetary Policy and Socio-Economic Factors on China’s CO2 Emissions and Ecological Footprint: A Multi-Methodological Analysis

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, CO2 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 CO2 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.