Unveiling the Influence of Green Taxes, Renewable Energy Adoption, and Digitalization on Environmental Sustainability in G7 Countries

Abstract

This study investigates the intricate interplay between environmental taxes, economic growth, renewable energy adoption, digitalization, and their combined impact on environmental quality across G7 nations. Positioned within the broader framework of sustainable development, environmental policy, digitalization, economic progress, and green energy, it employs sophisticated econometric methodologies like the Cross-Section Augmented Autoregressive Distributed Lag (CS-ARDL) model and the Dynamic Common Correlated Effects Mean Group (DCCEMG) estimator to overcome data complexities such as cross-sectional dependence and slope heterogeneity. The findings offer valuable insights into the dynamic relationship between environmental quality, economic growth, renewable energy utilization, digitalization, and the efficacy of environmental taxation. Additionally, the study proposes targeted policy recommendations aimed at bolstering sustainable development efforts aligned with international accords like the Paris Agreement and the Sustainable Development Goals. These proposed strategies advocate for a nuanced approach to environmental taxation, the promotion of renewable energy adoption, and leveraging digitalization to bolster environmental sustainability efforts across G7 nations.