Achieving carbon-neutral economies through circular economy, digitalization, and energy transition

Decarbonization is of utmost importance to effectively address climate change, advance environmental sustainability, and protect biodiversity and ecosystems. Therefore, developed and developing economies are focusing on adopting various approaches to achieve zero carbon emissions. Thus, this study attempted to generate a meaningful relationship between the circular economy, digitalization, energy transition, and eco-friendly trade strategy to capture the role of factors that function to attain carbon neutrality. For the above-given objectives, dynamic econometric methods, such as the cross-sectional autoregressive distributed lag model (CS-ARDL), were adopted to assess the G7 dataset between 1990 and 2022. These findings suggest that the parameters under investigation are important for achieving carbon neutrality in G7 in the long term. Moreover, Panel Corrected Standard Errors (PCSe) confirmed that every aspect affects carbon neutrality. Consequently, the long-term attainment of decarbonization is greatly aided by a circular economy, digitalization, energy transformation, and green trade. Thus, significant and comprehensive policy changes are needed in several sectors, such as the development of digitization, environmental regulations, sustainable and green technology, and renewable energy sources.