Policy Coherence for Carbon Neutrality: The Fiscal, Monetary, and Energy Strategies for Sustainable Development Goals

This study examines the association between fiscal policy, monetary policy, renewable energy use, natural resource rents, and economic growth with CO2 emissions in G‐20 economies from 1990 to 2023. Using annual panel data specified predominantly in logarithmic form, with monetary‐policy variables retained in levels, we apply the Method of Moments Quantile Regression (MMQR) to assess heterogeneous long‐run relationships across the emissions distribution. Robustness is evaluated through Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators. Three main results emerge. First, natural resource rents and fiscal spending (% of GDP) display positive elasticities with CO2 emissions across all quantiles. Second, renewable energy exhibits negative elasticities, with stronger emission‐reducing effects in higher‐emission quantiles. Third, tighter monetary conditions are associated with lower emissions, whereas economic growth is positively linked with CO2 levels throughout the distribution. Taken together, the findings suggest that carefully targeted fiscal restructuring, expanded renewable‐energy deployment, and prudent macro‐financial coordination can support long‐run decarbonization efforts in the G‐20, while recognizing that the results describe associations rather than causal effects.