Transforming the Nordic environment: The role of waste management and environmental taxes

Abstract Rapid urbanization in the Nordic region has intensified municipal solid waste (MSW) accumulation, straining waste management systems and contributing to ecosystem pollution through expanded transportation and industrial activities. This study investigates the effects of waste recycling, MSW, environmental taxes, and urbanization on the ecological footprint in the Nordic countries from 1995 to 2021. Employing second‐generation unit root tests, slope homogeneity analysis, and panel cointegration tests, followed by quantile regression, the results reveal that economic growth, MSW, and urbanization increase the ecological footprint, while higher recycling rates reduce it. Environmental taxes exert a mitigating effect on the ecological footprint primarily at higher quantiles. Robustness checks using Driscoll‐Kraay standard errors (DKSE), panel‐corrected standard errors (PCSE), and system generalized method of moments (GMM) confirm these findings. Dumitrescu‐Hurlin (D‐H) causality tests indicate bidirectional relationships between MSW and the ecological footprint, recycling rates and the ecological footprint, and urbanization and the ecological footprint. These insights provide valuable guidance for policymakers advancing sustainable development goals (SDGs) in the Nordic region.