Green Finance, Green Technology Innovation and Carbon Emission Intensity-Based on an Empirical Study in China

AbstractCarbon emission reduction has become the urgent requirement for achievement of China’s "double carbon" target and promotion of high-quality development. Previous literature shows that green finance and green innovation has long been regarded as a valid driving force in facilitating carbon reduction. This research empirical examines the spatial effects of green finance and green innovation on carbon emission intensity with a novel calculation method of dynamic Spatial Durbin Model employing panel data from 30 Chinese provinces in 2010-2020. The results demonstrate that: (1) Green finance has existed significant spatial spillover effects of decreasing carbon emission intensity. (2) The inhibitory effects of green finance and green innovation on carbon emission intensity are significant for various provinces in China. The development level of local green finance has positive spatial correlation with the carbon emission reduction in neighboring regions due to economic linkage effect and industry ripple effect. Green innovation has a "siphon effect" on regional carbon emission. (3) The non-linear nexus between green finance and green innovation on carbon emission intensity are "inverted N-shaped" and "inverted V-shaped", and exist huge differences in various regions areas. Green innovation acts as a mediator variable on the impact of green finance on carbon emission intensity. (4) Under the scenario of rapid development of green finance and green innovation, China's carbon peak target may be achieved by 2024. An overview of green financial governance initiatives across China is provided