Digital finance and carbon emissions: empirical evidence from China

Attaining sustainable economic growth while mitigating environmental degradation represents dual imperatives within China's sustainability objectives. In this context, digital finance emerges as a strategic tool enabling simultaneous progress toward these two pivotal goals. This study undertakes a rigorous investigation into the causative influence and transmission pathways of digital finance on regional carbon emissions. The analysis encompasses a robust sample size of 1471 districts and counties spanning the period from 2012 to 2017 and leverages a fixed-effects model within a panel data context. Our research unearths several key findings: (1) digital finance plays a substantive role in diminishing regional carbon emissions; (2) technology innovation and energy utilization efficiency serve as partial mediators in the relationship between digital finance and carbon emissions, with the influence of the latter eclipsing that of the former overall; (3) the impact of digital finance on carbon emissions is most pronounced in cities characterized by mature industries and a reliance on renewable resources. These insights hold significant implications for policymakers, shedding light on the latent potential of digital finance as a lever to abate regional carbon emissions.