Research on the impact of green finance on carbon emissions: evidence from China

Green finance is an effective means adopted by the Chinese government to reduce carbon emissions. Does the development of green finance in Chinese provinces reduce carbon emissions to a certain extent? This study selects panel data of various provinces and cities in China from 2003 to 2019. Based on the Hansen threshold regression model, an empirical analysis is conducted with economic growth and industrial structure as threshold variables to test the impact of green finance on carbon emissions. The results show that green finance increases the speed of carbon emission mitigation when PGDP is the threshold. Taking industrial structure as the threshold, the impact of green finance development on carbon emissions presents an inverted N shape. At the same time, it is found that green finance has become an important means to reduce carbon emissions in the eastern region, the impact of green finance on carbon emissions in the central region presents an inverted U shape, and the driving force of green finance on carbon emission reduction in the western region is weak. Furthermore, it is pointed out that improving the quality of green finance and enhancing the level of green finance empowered by science and technology are the keys to realizing sustainable green development.