Each environment is created under a AAD, Only users within that tenant can access its resources. An environment is also bound to a geographic location, like the United States. When you create a Microsoft Dataverse database in an environment, that database is created within datacenters in that geographic location. Any items that you create in that environment (including connections, gateways, flows that are using Power Automate, and more) are also bound to their environment's location.
You can create more than one environment to manage solution development and data storage by setting up one environment for development, another for testing, and another for production use. Also, you can set up an environment based on a geographical location. For example, you might set up an environment for Europe and another for Asia. Each of these environments has zero or only one instance of Microsoft Dataverse.
: Users can create up to three Developer environments, which do not require a paid license and do not consume tenant capacity. Each environment has a maximum database size of 2 GB and is intended for exploration, not production use.
each environment requires 1GB of storage space from your Tenant and you can't create a new environment without it. If you don't have the space, you need to either purchase or create more space in your tenant.