Recalibrating Climate Strategies: The Interplay of Green Energy, Digitalization, and Governance in Emissions Mitigation

ABSTRACT As developed economies accelerate their shift from fossil fuels to sustainable energy systems, understanding how structural, technological, and institutional factors interact to shape carbon emissions becomes critical. This study investigates the heterogeneous impacts of green energy transition, energy intensity, digitalization, and governance on carbon emissions across 25 developed countries from 1999 to 2024. Employing a combination of fixed effects estimation, method of moments quantile regression (MMQR), and common correlated effects (CCE) estimation, we uncover nuanced, quantile‐specific dynamics that traditional mean‐based approaches overlook. Our findings reveal that green energy transition consistently mitigates emissions, with its strongest effects in low‐ and middle‐emission contexts, while structural rigidities attenuate its influence in high‐emission economies. Energy intensity demonstrates minimal influence in low‐emission countries but plays a pivotal role in moderating emissions where industrial activity is intensive. Digitalization amplifies emission reductions, particularly in moderately emitting economies, while governance underpins these effects by enhancing policy enforcement and institutional capacity. Crucially, interactions between green energy transition, digitalization, and governance underscore the power of integrated strategies: emission reductions are maximized when renewable energy adoption is coupled with advanced digitalization and robust governance. These results offer actionable insights for designing context‐sensitive, multidimensional climate policies that advance SDGs 7, 8, and 13.