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The escalating levels of CO2 emissions from the transportation sector have been observed to exert deleterious effects on human well‐being and environmental sustainability. To mitigate these emissions, it is imperative to consider the potential contributions of environmental policies and financial innovation. Thus, this study examines the effects of financial innovation and environmental policy (environmental tax–environmental technology) on transport‐related CO2 emission (TCO2E) for BICS (i.e., Brazil, India, China and South Africa), which are characterized by substantial industrialization, rising TCO2E and growing environmental concerns. The analysis is complemented by including control variables, notably economic growth and the transition to cleaner energy, to offer a nuanced and holistic perspective on the dynamics governing this critical subject matter. The research adopts a novel econometric approach cross‐sectionally augmented auto‐regressive distributed lags for benchmark estimation and fully modified ordinary least squares–dynamic ordinary least squares for robustness analysis from 2000/Q1‐2018/Q4. The findings revealed that financial innovation and economic growth bolster TCO2E and decrease environmental quality in the region. In contrast, environmental tax, environmental innovation and energy transition decrease TCO2E. Based on findings, policy suggestions relating to implementing a carbon tax, promoting green financial innovation and others are discussed to decrease TCO2E. [ABSTRACT FROM AUTHOR]

Germany has set an ambitious goal of meeting the recommendations of COP‐26 and reducing its carbon intensity to zero by 2045. Germany is a leader in environmental patents after the United States, Japan, and South Korea, and the environmental implications of Germany's leadership in eco‐innovation hold important clues for achieving net zero goals. In particular, the European Union is one of the global communities making the greatest efforts to combat emissions, and the success of the leading role of environmental patents in this Union in reducing CO2 emissions is an important research topic for scholars. Therefore, this study investigates the impact of environmental patents on CO2 emissions under the environmental Kuznets curve (EKC) hypothesis in Germany. To this end, the study applies Bayer–Hanck and Fourier ADL approaches from 1970 to 2019. The main findings do not confirm the EKC hypothesis, while environmental patents play an active role in CO2 reduction. Based on these outcomes, Germany should consider a long‐term green policy to decouple economic growth and emissions. At the same time, German policy should promote the development and application of environmental patents to achieve the net zero targets for 2045. [ABSTRACT FROM AUTHOR]