The hidden sources of CO₂: how growth, technology and energy shape environmental responsibility in the G7

This study aims to identify the primary sources of CO₂ emissions and environmental degradation in the G7 economies, with a focus on the intertwined roles of energy use, technological advancements and economic growth. In light of global efforts towards achieving carbon neutrality, understanding these relationships is crucial for striking a balance between environmental responsibility and sustainable development. By using the ecological footprint as a comprehensive indicator of environmental pressure, the research aims to explain how the combined effects of renewable and fossil fuel consumption, information and communication technology (ICT) and GDP per capita collectively influence environmental quality across high-income economies.

The study uses annual panel data for the G7 countries, spanning the period from 2000 to 2022. A panel quantile regression approach captures heterogeneous effects across the distribution of environmental quality. At the same time, robustness is tested using fully modified ordinary least squares, Dynamic Ordinary Least Squares (DOLS) and pooled mean group–autoregressive distributed lag estimators. CO₂-related energy consumption from four sub-sectors – transport, industry, buildings and power – is included to capture detailed emission sources. This methodological combination ensures consistent short- and long-term parameter estimation, allowing for a nuanced understanding of how energy, growth and technology interact in shaping ecological outcomes.

The empirical findings reveal that GDP per capita increases environmental degradation in the short term but contributes to improvement in the long run, confirming both the Environmental Kuznets Curve and Energy Ladder hypotheses. ICT exhibits a mixed relationship, with positive environmental effects in higher quantiles where technological maturity is greater. Fossil fuel consumption across all sub-sectors significantly deteriorates environmental quality, while renewable energy initially exerts pressure on ecosystems but later improves sustainability outcomes as adoption expands and efficiency rises.

This paper provides novel insights into the sectoral and technological sources of CO₂ emissions within the G7 economies by integrating ecological footprint dynamics with energy sub-sectoral data. Unlike previous studies that treat emissions in aggregate, it distinguishes the specific contributions of transport, industrial, power and building-related energy use. The research further enriches the sustainability literature by demonstrating how ICT and renewable energy transitions can mitigate the environmental costs associated with growth. The findings offer policy guidance for achieving carbon neutrality through technological innovation and targeted energy diversification strategies.