The integration of artificial intelligence (AI) and automation into green transportation systems holds significant promise for advancing sustainable mobility solutions. However, these efforts are facing ethical challenges associated with moral licensing that can result in undoing the initiatives. This chapter relates travel behavior associated with green transportation initiatives to the psychological effect of moral licensing whereby people justify socially detrimental behaviors because of their engagement in sustainable practices. In that regard, we introduce moral licensing and its relation and effect on green transportation. Secondly, we will be discussing how AI and automation can be both painkillers and pain points for such ethical dilemmas. We borrow lessons from case studies and empirical research to capture how moral licensing affects policy implementation, consumer behavior, and technological adoption in relation to green transportation. Finally, ways of leveraging AI and automation in building robust and ethical frameworks to help make true sustainability a reality are presented. In this respect, this chapter aims to contribute to the process of evolving a more holistic and pragmatic mode of transportation ensuring that green transportation systems drive forward under the thrust of advanced technologies without the drag of moral licensing.