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Can green finance improve carbon emission efficiency?
Wei Zhang1, Zhangrong Zhu2,3, Xuemeng Liu1
1School of Economics and Management, China University of Geosciences, Wuhan, 430078, China.
Green finance significantly boosts carbon emission efficiency in China, particularly through technological advancements and industrial restructuring. Regional disparities exist, highlighting the need for tailored green finance strategies to achieve carbon neutrality goals.
Area of Science:
- Environmental Economics
- Climate Change Policy
- Sustainable Finance
Background:
- China faces challenges in carbon emission efficiency, with notable regional disparities.
- Green finance is emerging as a critical tool for environmental sustainability.
Purpose of the Study:
- To investigate the impact and mechanisms of green finance on carbon emission efficiency in China.
- To provide empirical evidence for achieving carbon peaking and carbon neutrality goals.
Main Methods:
- Utilized panel data from 27 Chinese provinces (2008-2017).
- Employed the slack-based model for unexpected output to measure carbon emission efficiency.
- Applied the Tobit model to analyze the influence of green finance.
Main Results:
- Carbon emission efficiency in China is generally low and exhibits a decreasing gradient from east to west.
- Green finance demonstrates a significant positive impact on improving carbon emission efficiency.
- The influence of green finance varies across different regions and groups.
Conclusions:
- Green finance enhances carbon emission efficiency primarily through driving technological progress and upgrading industrial structures.
- Findings offer crucial insights for developing effective green finance policies to support China's climate objectives.
- The study underscores the role of green finance in the evolution towards a low-carbon economy.
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