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How green growth affects carbon emissions in China: the role of green finance

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  • Jun Zhao
  • Farhad Taghizadeh-Hesary
  • Kangyin Dong
  • Xiucheng Dong

Abstract

Accelerating the green transition of the economy is an effective way to conserve energy and reduce emissions, and its impact on the greenhouse effect deserves in-depth discussion. Based on this, we examine the potential effect of China’s green growth on carbon dioxide (CO2) emissions by applying provincial panel data from 2004 to 2018. The regional heterogeneity and how does green finance affect the green growth-CO2 nexus are also checked. The primary findings imply that: (i) China’s green growth achieves preliminary results, and its impact on CO2 emissions is significantly negative. Also, green finance can facilitate carbon emission reduction; (ii) significant regional heterogeneity exists within various regions. Only in the central and western regions can green growth effectively reduce CO2 emissions, and in the eastern and central regions, green finance is conducive to promoting carbon reduction; and (iii) the mediating role of green finance is significant. In other words, China’s green growth not only mitigates the greenhouse effect directly, but also affects CO2 emissions indirectly by accelerating the development of green finance.

Suggested Citation

  • Jun Zhao & Farhad Taghizadeh-Hesary & Kangyin Dong & Xiucheng Dong, 2023. "How green growth affects carbon emissions in China: the role of green finance," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 2090-2111, March.
    • Handle: RePEc:taf:reroxx:v:36:y:2023:i:1:p:2090-2111
    DOI: 10.1080/1331677X.2022.2095522
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    Cited by:

    1. Zhang, Guowei, 2023. "The heterogeneous role of green finance on industrial structure upgrading - Based on spatial spillover perspective," Finance Research Letters, Elsevier, vol. 58(PC).
    2. Yu, Zhong, 2024. "Do natural resources promote carbon neutrality: The role of green finance," Resources Policy, Elsevier, vol. 88(C).
    3. Christos Karelakis & Zacharias Papanikolaou & Christina Keramopoulou & George Theodossiou, 2024. "Green Growth, Green Development and Climate Change Perceptions: Evidence from a Greek Region," Agriculture, MDPI, vol. 14(8), pages 1-17, July.
    4. Chen Han & Lu Yang, 2024. "Financing and Management Strategies for Expanding Green Development Projects: A Case Study of Energy Corporation in China’s Renewable Energy Sector Using Machine Learning (ML) Modeling," Sustainability, MDPI, vol. 16(11), pages 1-33, May.
    5. Zhaoliang Ma & Zhengdong Fei, 2024. "Research on the Mechanism of the Carbon Emission Reduction Effect of Green Finance," Sustainability, MDPI, vol. 16(7), pages 1-15, April.
    6. Safi, Adnan & Kchouri, Bilal & Elgammal, Walid & Nicolas, Melhim Khoury & Umar, Muhammad, 2024. "Bridging the green gap: Do green finance and digital transformation influence sustainable development?," Energy Economics, Elsevier, vol. 134(C).
    7. Xiao, Yi & Chen, Ke, 2024. "Green finance, natural resource dependence and environmental quality: Evidence from China," Resources Policy, Elsevier, vol. 92(C).

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