Title: A pathway towards sustainable development: Exploring the dynamic effects of macroeconomic policies on the environmental quality in developing countries

Abstract

The global acceptance of, and belief in, technical improvements to mitigate natural resource scarcity has resulted in not just smugness in the handling of environmental issues, but also certain incorrect foundations for policymaking. Environmental contamination has been a subject of research around the world because of its impact on billions of people. According to existing literature, CO2e, CH4 and N2O are the primary causes of environmental degradation. However, in recent years, research on environmental degradation and climate change has focused on the consumption of non-durable energy resources and gases fuel sources. In this regard, the current research covers a knowledge vacuum by establishing a new model that combines macroeconomic policies, GDP, FFC, and REC with environmental quality, including greenhouse gas emissions, for 16 developing ASIAN nations from 1990 to 2017. The Kao and Westerlund cointegration test validates the variables' long-run relationship. Slope homogeneity and cross-section dependence tests, second-generation panel unit root test, Westerlund co-integration test, and cross sectional autoregressive distributed lag were used to examine the data. The results of the econometric approaches are as follows: Firstly, the expansionary monetary and fiscal policies exacerbate the harmful effects of CO2, methane, and nitrogen oxide. Contractionary fiscal policy, on the other hand, is an effective approach for mitigating CO2e's negative impacts. Secondly, expansion and contraction in the monetary policy, respectively, degrade and improve environmental conditions. Thirdly, both the gross domestic product as well as the use of fossil fuels are linked to pollution. Fourth, renewable energy resources improve air quality by lessening emissions of carbon dioxide, methane, and nitrogen oxides. The findings of this study may be useful in this regard. To achieve long-term favorable economic performance while also reducing environmental deterioration in the country, the government should consider taking efforts to limit carbon dioxide emissions from diverse businesses that contribute to climate change.