Toward a Sustainable Future: The Roles of Finance, Energy, and Human Capital in Shaping Carbon Outcomes in E7 Economies

Achieving sustainability in the face of climate change requires a clear understanding of how industrial activity, renewable energy adoption, natural resource depletion, and human capital shape carbon outcomes in emerging economies. This study analyzes the key drivers of carbon dioxide emissions (COE) in E7 countries (Brazil, China, India, Indonesia, Mexico, Russia, and Turkey), focusing on the interaction between economic growth dynamics and circular economy performance. Using annual data from 2000 to 2022 and applying robust econometric procedures, including cross‐sectional dependence (CD) tests, Westerlund cointegration, and Method of Moments Quantile Regression (MMQR), the results reveal strong heterogeneity across the emissions distribution. Industrial activity (IND) consistently increases carbon emissions (COE), while renewable energy consumption (REC) contributes to mitigation. Biomass energy (BMN) use exerts an emissions‐reducing effect, particularly in lower‐emission contexts, supporting the transition toward a cleaner energy mix. Conversely, adjusted savings indicators for energy depletion (ASE) and mineral depletion (ASM) increase emissions, confirming the environmental pressures of resource‐intensive development. Human capital (HCL) significantly reduces emissions by facilitating efficiency and technological adaptation. Robustness checks using AMG, CCEMG, FMOLS, and DOLS estimators validate these findings. The study emphasizes the need for targeted circular‐economy policies, renewable energy expansion, industrial restructuring, and human capital investment to drive low‐carbon development pathways in E7 economies.