Can carbon finance promote high quality economic development: evidence from China

Utilizing provincial panel data from China spanning 2000 to 2020, this study constructed an indicator system for high-quality economic development by incorporating 35 indicators. These indicators stem from five domains: innovative, coordinated, green, open, and shared development. To assess carbon finance development, an evaluation system was created using twelve basic indicators derived from three categories: financial environment, energy efficiency, and scientific and technological progression. The entropy weight method facilitated the computation of indices such as the economic quality development, innovative development, coordinated development, green development, open development, shared development, and carbon finance development indices. Both static and dynamic panel models served to empirically ascertain the specific influence of carbon finance on high-quality economic development. Additionally, regional and temporal variances in carbon finance's impact on high-quality economic development were scrutinized. Findings indicate that provinces like Beijing, Shanghai, Jiangsu, and Guangdong, known for advanced economic development, exhibit elevated levels of high-quality economic and carbon finance development. Nonetheless, disparities among provinces are evident. While carbon finance significantly bolsters China's high-quality economic growth, its influence is not uniformly observed across all five development domains. It primarily augments coordinated, green, and shared development. Furthermore, the role of carbon finance in boosting China's high-quality economic development exhibits regional and temporal variations. The promotion of high-quality economic growth can be achieved by fostering an amenable carbon finance environment, addressing aging, maximizing governmental influence, enhancing transportation infrastructure, propelling new urbanization, and refining education standards.