Unveiling the influence of environmental taxes, socioeconomic conditions, renewable energy, and financial globalization on environmental sustainability

Abstract The augmented resource consumption, higher demand for resources, and limited supply promote a major resource crisis in a number of the largest economies. This crisis upsurges the ecological footprint (EF) augmenting the process of resource depletion and enhancing ecological degradation. Against this backdrop, this investigation aims to apprehend the interplay between environmental policy, socioeconomic conditions (SEC), financial globalization (FG), renewable energy (RN), and the EF within the top 10 economies. Driven by their massive economic growth, the top 10 economies have become entangled in a vicious cycle of resource consumption and environmental degradation. To understand these relationships, the Method of Moments Quantile Regression (MM‐QR) is adopted, which helps to identify the impacts of regressors on EF from 2000 to 2021. The findings of this analysis denote that environmental taxes (ETX) reduce the EF in the context of top economies without much variation. RN bolsters reductions in the EF, displaying an escalating impact that ranges from the 10th to the 90th quantiles. FG reduces the EF across various quantiles, with its effects stimulating from lower to upper quantiles. The findings did not reveal any statistically significant effects of SEC on the EF. Additionally, the study observed a U‐shaped relationship between EF and economic growth, indicating a potential escalation of environmental issues with further development in the upcoming years. The study provides in‐depth policy directions for increasing the utilization of renewables and enhancing the FG to enhance environmental sustainability.