MEASURING THE IMPACT OF ECONOMIC POLICIES ON CO₂ EMISSIONS: WAYS TO ACHIEVE GREEN ECONOMIC RECOVERY IN THE POST-COVID-19 ERA

Regional attempts to reduce pollution levels emerging from the European Union (EU) relative to 2010 are contrasted with unique policies of individual member countries’ aims to achieve a 10% reduction per country. Given this scenario, this research expands on the topic by developing a novel framework that links macroeconomic policies, total national expenditure per person, traditional energy use, renewable energy use, and CO 2 emissions levels in EU countries from 1990 to 2016. The study utilizes the second generation cross-sectional-autoregressive-distributed lag (CS-ARDL) panel data method. According to the study’s findings, the monetary instruments of growth exacerbated the adverse effects of CO 2 emissions, and by tightening monetary policy, the harmful effects of CO 2 emissions levels have been reduced. Further, the Granger causality test indicates a bidirectional causality between monetary policy and CO 2 emissions levels, and unidirectional causality from the policy assessment for energy use. The finding confirms that the assessment policy recommendations on energy consumption have future effects on ecological value.

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