In recent decades, stringent environmental policies have gained prominence to tackle rising ecological and environmental threats and achieve energy transition. The current research extends fiscal and environmental deliberations by analyzing how fiscal, environmental and energy policies impact energy transition in advanced industrial economies. Our empirical analysis helps us identify that renewable energy, economic developments and environmental stringency ensure energy transition. On the other hand, fossil fuels, governmental expenditures and taxation revenues hinder ecological progress and energy transition. Based on our analysis, we propose that policymakers must align fiscal and environmental policies to bring structural changes and upgrade energy infrastructure to combat environmental threats from climate change.