Can green finance promote the low-carbon transformation of the energy system? New evidence from city-level data in China

Zhang S 1 , Dou W 2 , Ji R 3 , Afthanorhan A 4 , Hao Y 5

Affiliations 

  • 1 School of Economics and Resource Management, Beijing Normal University, Beijing, 100875, China. Electronic address: ierm@bnu.edu.cn
  • 2 School of Economics and Resource Management, Beijing Normal University, Beijing, 100875, China. Electronic address: 202231410005@mail.bnu.edu.cn
  • 3 School of Economics and Resource Management, Beijing Normal University, Beijing, 100875, China. Electronic address: 202331410005@mail.bnu.edu.cn
  • 4 Operation Research & Management Sciences Research Group, Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA), Kuala Nerus, Malaysia. Electronic address: asyrafafthanorhan@unisza.edu.my
  • 5 School of Economics, Beijing Institute of Technology, Beijing, 100081, China; Faculty of Economics, Shenzhen MSU-BIT University, Shenzhen, 518172, China; Digital Economy and Policy Intelligentization Key Laboratory of Ministry of Industry and Information Technology, Beijing, 100081, China; Operation Research & Management Sciences Research Group, Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA), Kuala Nerus, Malaysia. Electronic address: haoyuking@gmail.com
J Environ Manage, 2024 Aug;365:121577.
PMID: 38943748 DOI: 10.1016/j.jenvman.2024.121577

Abstract

This study explores the comprehensive effects of green finance (GF) on the low-carbon transition of the energy system (LTES) by analyzing panel data from 281 cities in China from 2006 to 2021. It is found that GF significantly reduces overall energy consumption and exhibits a U-shaped association with energy efficiency, while its relationship with the energy consumption structure is inverted U-shaped. After accounting for endogeneity in the robustness tests, these findings remain consistent and are therefore deemed reliable. A mechanistic analysis reveals that GF promotes industrial upgrading, technological progress, and economic agglomeration, collectively facilitating the LTES. The impact of GF on LTES shows considerable variation among regions, influenced by their levels of economic growth, extents of marketization, and governmental environmental preferences. Our findings provide new evidence for the relationship between GF and LTES, offering a scientific basis for formulating GF policies to accelerate this transformation.

* Title and MeSH Headings from MEDLINE®/PubMed®, a database of the U.S. National Library of Medicine.

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