<p>This study on European countries highlights how environmental fiscal policies, innovation, and renewable energy adoption can support long-term decarbonization. This impact is assessed on CO₂ emissions across 24 European economies from 2000 to 2024 using chaotic, asymmetric, and distributional models to capture complex policy responses. The estimates suggest that environmental taxation and spending consistently lower CO₂ emissions, with effects that are substantially stronger in high-emission countries; a 1% increase in environmental spending reduces emissions by more than 6% in the long run. Similarly, a 1% increase in renewable energy consumption reduces emissions by over 9%, while a comparable rise in innovation lowers emissions by around 8%, underscoring the importance of technological progress. Low-carbon technology trade also contributes to mitigation, although its effectiveness is shaped by each country’s absorptive capacity and trade structure. Across all models, adverse policy shocks, such as cuts in environmental spending or reductions in environmental taxes, produce disproportionately larger increases in emissions, underscoring the risks of policy reversals. By integrating chaotic dynamics with asymmetric and distributional analysis, this study provides a more comprehensive framework for understanding policy effectiveness. The findings highlight the need for stable carbon-pricing systems, sustained investment in clean innovation, and strengthened international technology cooperation to accelerate the transition toward a low-carbon future. A robustness analysis incorporating GDP per capita growth as a proxy for economic activity confirms that the study’s principal findings remain qualitatively unchanged.</p>