ABSTRACT Despite technical advancements and good governance, the G7 economies still significantly contribute to global CO 2 emissions, illustrating the ongoing difficulty of balancing growth and sustainability. This paper analyzes the economic, institutional, and technological factors affecting CO 2 emissions and environmental quality in G7 countries from 1990 to 2022. It uses the Environmental Kuznets Curve (EKC), institutional theory, and technological innovation theory to develop a dual‐model approach based on the Energy Transition Index (ETI) and the Green Quality Index (GREENQ) to capture both efficiency and ecological sustainability. Using advanced panel estimators like Driscoll–Kraay Fixed Effects, Prais–Winsten PCSE, and Feasible GLS, the results support the EKC hypothesis, indicating a nonlinear link between GDP and CO 2 emissions. AI reduces emissions, highlighting its importance in energy optimization and decarbonization. The link between Institutional Quality (IQ) and CO 2 emissions is positive and significant, suggesting that institutional robustness in advanced economies may not always lead to environmental accountability. ETI shows transitional emission rises during energy restructuring, whereas globalization reduces emissions through technical diffusion. This study sheds light on advanced countries' structural and transitional emission behavior by incorporating AI, institutional capacity, and globalization into a sustainability model. The findings help achieve SDGs 7, 9, 11, 12, and 13 by providing evidence‐based guidance for low‐carbon growth, technology, and governance.
Ma et al. (Tue,) studied this question.