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This study examines the role of tax regulation and energy efficiency in promoting sustainable economic growth in China over the period 1995–2023. Drawing on panel data and employing Panel-Corrected Standard Errors (PCSE) and Feasible Generalized Least Squares (FGLS) estimation techniques, the analysis investigates how fiscal policy instruments and regulatory frameworks influence energy efficiency improvements and overall economic performance. Specifically, the study explores the extent to which tax policies—such as environmental taxes, carbon-related levies, and fiscal incentives for clean technologies—shape energy consumption patterns and industrial productivity. The empirical findings indicate that well-designed tax regulations play a significant role in enhancing energy efficiency by incentivizing firms to adopt cleaner production technologies and optimize resource utilization. Energy efficiency improvements are found to contribute positively to economic growth by reducing production costs, improving competitiveness, and mitigating environmental externalities. Moreover, the interaction effects reveal that effective tax regulation strengthens the positive impact of energy efficiency on economic growth, demonstrating that fiscal policy serves as a critical moderating mechanism in China's green transition. The results further suggest that regulatory consistency and targeted tax incentives foster technological innovation, encourage investment in energy-saving infrastructure, and accelerate structural transformation toward low-carbon industries. A key policy implication is that Chinese policymakers should continue refining environmental tax systems and strengthening regulatory enforcement to promote energy efficiency, enhance environmental sustainability, and sustain long-term economic development. • FDI moderates the REC–growth nexus in 20 West African nations. • REC alone shows a negative effect on economic growth in the region. • FDI enhances renewable adoption through capital and technology transfer. • Robust PCSE, FGLS, and 2SLS confirm strong REC–FDI–growth interaction.