Energy Transition Strategy and the Scale–Composition Association: How Fiscal Instruments Relate to Renewable-Energy Share, Energy Demand, and Decarbonization for Sustainable Development Across Developing and Developed Economies

National energy strategies increasingly treat renewable-capacity expansion as a proxy for decarbonization progress. This paper tests that proxy by separating energy-system change into two margins—composition (renewable share) and scale (energy demand)—and estimating how three fiscal instruments (tax revenue, government expenditure, public debt) relate to each before assessing their combined association with net CO2 emissions. Using a panel of 62 developing and developed economies (2002–2022), estimated with two-way fixed effects and Driscoll–Kraay standard errors, we find the scale channel is associated with emissions at a standardized magnitude 10–28 times larger than any fiscal-instrument coefficient. In developing economies, fiscal instruments are associated with renewable-energy composition but not energy-use scale, though a bootstrap mediation test does not confirm this pathway (all indirect effects null); institutional quality strengthens this composition channel rather than redirecting allocation toward scale. In developed economies, only tax revenue reaches both margins; government expenditure and public debt are associated with composition only, and with a lower, not higher, renewable share. A complementary carbon-intensity specification—addressing the concern that CO2 per capita is partly definitional in energy use—shows tax revenue and government expenditure are independently associated with higher carbon intensity in both groups: an open complication in the composition-channel story. These results are associational, not causal; the demand-restraint implication for developing-economy strategy is offered as a hypothesis, not an established result. These findings bear directly on SDG 7 (affordable clean energy), SDG 13 (climate action), and, through the distributional check, SDG 10 (reduced inequalities).