The Impact of Green Finance on Carbon Emissions: An Empirical Study Based on Spatial Metrology

Abstract

Green finance plays a crucial role in driving industrial transformation and upgrading, crucial for China’s dual carbon goals. This study constructs comprehensive green finance indicators from market and policy perspectives using the entropy method. Panel data from 30 Chinese provinces (2007-2020) is analyzed via spatial Durbin model to assess the impact of green finance policies on carbon emissions, considering driving mechanisms and geographical heterogeneity. Findings show a steady increase in green finance development across Chinese provinces, with the east leading. Local green finance significantly correlates with carbon reduction, especially in the east and central regions. Policy recommendations are derived from these insights. The final policy recommendations come from these insights.