Unveiling the criticality of digitalization, eco‐innovation, carbon tax, and environmental regulation in G7 quest for carbon footprint mitigation: Insights for sustainable development

AbstractA great deal of empirical research has been conducted to find effective solutions to global warming, which is widely recognized as a major cause of environmental degradation and overall decline in well‐being. It should be noted that international coalitions such as the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United) are not left of the ravaging adverse effects of environmental pollution. Consequently, this study contributes to the literature by examining the role of digitalization on carbon footprint amidst environmental‐related technologies, renewable energy, environmental policy stringency, carbon tax, and financial development in G7 countries from 1996 to 2019. The study relies on cross‐sectional autoregressive distributed lag, common correlated effects mean group, augmented mean group, and method of moment quantile regression (MMQR). Results from the analyses show that digitalization is an essential mitigating tool for the surging carbon footprint in G7 countries. Besides, the imperatives of other covariates in subduing the adverse environmental effects of carbon footprint are empirically supported except for financial development. Remarkably, the distributional effects of the exogenous variables on carbon footprint based on MMQR are found robust for the primary analyses. The direction of cause standing between bidirectional and unidirectional heightens the novelties of this study. Based on the findings, sustainable footprint policies in G7 economies are suggested.