Enhancing Environmental Sustainability: The Role of Resource Productivity, Low‐Carbon Energy, and Energy Productivity

Enhancing environmental quality through resource productivity (REP), low‐carbon energies, and energy productivity (ENP) is pivotal for ecological sustainability. With the increase in REP, the use of hydrocarbons is reduced, the use of natural resources decreases, effective waste management is adopted, and sustainable production and consumption models are adopted to reduce environmental pollution. ENP improves environmental quality by increasing efficiency in energy usage and pricing. European Union (EU) nations aspire to achieve considerable carbon neutrality by 2050 in order to mitigate the negative consequences of socioeconomic activities such as global warming, climate change, and environmental issues. In this context, enhancing REP, low‐carbon energy (LCE) consumption, and ENP in EU nations can help to minimize environmental pollution. Previous studies on the subject have generally used carbon dioxide emissions or ecological footprints as indicators of environmental pollution. This study uses the load capacity factor (LCF), which includes both the supply and demand sides of the environment, as an indicator of environmental pollution. Furthermore, limited studies have been conducted in the literature on the impact of natural resources, ENP, and REP on the LCF. This study examines the combined effects of natural resource rents (NAR), ENP, REP, and LCE consumption on LCF in EU economies. In this respect, the study differs from other studies in the literature and is expected to contribute to the literature in several ways. This study examines how natural resources, REP, LCE, and ENP affect environmental sustainability in 21 EU countries in the period 2000–2021. Another significant goal of the study is to meet Sustainable Development Goals (SDGs) 7, 8, 9, 12, and 13. According to robust long‐run estimating findings from the panel, increasing REP is positively associated with environmental quality in Bulgaria, Croatia, Hungary, Slovenia, and Sweden. Increased NAR have a detrimental impact on environmental quality in Austria, France, and Slovenia. LCE consumption emerges as a driver of environmental quality improvement in Croatia, Estonia, Hungary, Spain, and the panel group. In conclusion, market‐based solutions, including enhanced REP and LCE, are critical for minimizing environmental pollution. This study not only highlights their significance but also offers policy insights for advancing environmental quality nationally.