Exploring the intersection between sustainable finance and achieving carbon neutrality in the transportation sector

In the context of China's transportation sector, which has faced escalating challenges in carbon emissions, this study delves into the intricate nexus between sustainable finance strategies and the imperative of achieving carbon neutrality. Spanning the years 2010-2022 across 30 provinces of China and employing a rigorous Panel Model methodology, our research sets out to achieve several pivotal objectives. These include assessing the tangible impact of sustainable finance initiatives on curtailing carbon emissions within the transportation domain, discerning the pivotal drivers that influence the trajectory of carbon neutrality endeavors, and critically evaluating the efficacy of policy interventions aimed at fostering sustainability. Our findings unearth a compelling narrative. Firstly, we observe a discernible positive correlation between the implementation of sustainable finance mechanisms-such as green bonds, sustainable investment portfolios, and innovative financial instruments-and the tangible reduction of carbon emissions within the transportation sector. Secondly, our analysis underscores the indispensable role of key drivers, ranging from technological advancements and regulatory frameworks to evolving consumer behavior and public consciousness, in steering the course towards carbon neutrality. Thirdly, our research underscores the pivotal impact of targeted policy interventions, emphasizing the efficacy of measures aimed at incentivizing sustainable practices, fostering stakeholder collaborations, and bolstering industry-wide accountability frameworks. In light of these insights, our study advocates for a nuanced policy landscape characterized by a multifaceted approach. By aligning financial incentives with sustainability goals, fostering technological innovation, and fostering robust regulatory frameworks, policymakers can catalyze a paradigm shift towards carbon neutrality in the transportation sector.