Stimulating the adoption of green technology innovation, clean energy resources, green finance, and environmental taxes: The way to achieve net zero CO2 emissions in Europe?

The European Green Deal aims to make Europe the world's first carbon-neutral continent by 2050 - a continent with net-zero carbon emissions. Stimulating the adoption of green technology innovation, clean energy, green finance, and environmental policies are considered effective strategies for achieving Europe's climate goals. This study examines the impact of green technology innovation, renewable energy utilization, financial development, and environmental tax on CO2 emissions in 25 European countries from 1990 to 2019 while controlling for nonrenewable energy utilization, human capital, and GDP. The fixed effect model and generalized method of moments (GMM) are employed based on the STIRPAT model. The results show that renewable energy utilization, environmental tax, and human capital significantly reduce CO2 emissions in the realization of Europe's net zero emissions, whereas green technology innovation, financial development, nonrenewable energy utilization, and GDP per capita significantly increase CO2 emissions. Financial development has a favorable green technology innovation effect on environmental quality. The quantile-on-quantile regression results show significant CO2 emissions-mitigating effects of green technology innovation, renewable energy utilization, environmental tax, human capital, and financial development. Nonrenewable energy utilization and GDP per capita capture a strong role in propelling CO2 emissions. Policymakers in European countries can leverage the insights from the study findings to achieve net zero CO2 emissions through strategic integration of clean energy resources, human capital and environmental tax measures, serving as a model for other countries aiming for net zero emissions.