Analysis of the interactive relationship between biofuels, technological innovation, and green finance: <scp>G7</scp> country evidence

Abstract An understanding of the synergistic relationship between biofuels, technological innovation, and green finance is essential for reducing CO 2 emissions and protecting the environment. This study investigates the combined effects of these factors on the transition to a low‐carbon economy, emphasizing their role in sustaining a healthy environment for future generations. The analysis covers 1980 to 2021 and focuses on the Group of Seven (G‐7) countries. Carbon dioxide emissions are used as a proxy for the environmental sustainability impacts of biofuels. In addition to biofuels, the study examines the influence of coal consumption, economic growth, environmental technologies, population dynamics, and affluence on environmental sustainability. The results indicate that biofuel production and consumption enhance environmental sustainability, whereas population growth, affluence, coal consumption, and environment‐related technologies reduce it.