Abstract
To respond to global climate change and achieve a “carbon peak” and “carbon neutrality” as soon as possible has become a common goal around the world. Economic growth relies heavily on financial development; indeed, low-carbon economic development is inseparable from financial support. This paper studies the impact of financial development on carbon emission intensity and its mechanism from both theoretical and empirical aspects. Based on the 2005–2018 data on Chinese cities and the Spatial Durbin Model (SDM) research results, this paper finds that: (1) Financial development has significantly reduced China’s carbon emission intensity overall. After considering spatial effects, financial development increases local carbon emission intensity, although it may lead to a more significant decrease in the surrounding area. (2) The analysis of heterogeneity shows that only the financial development in the eastern region has a substantial detrimental impact on total carbon emission intensity and the carbon emission intensity of neighboring cities. The financial development in the central and western regions has no significant effect on carbon emission intensity. (3) The mechanism test shows that financial development mainly reduces carbon emission intensity through technological innovation and structural optimization, with the effect of technological innovation being 9.5%, and the effect of structural optimization being 12.15%. The expansion of the consumption effects of financial development has no significant impact on carbon emission intensity. Accordingly, this article believes that it is necessary to further support financial development, build large-scale financial centers, continue to optimize the structure of financial products, and encourage the development of green finance.
Highlights
Published: 28 October 2021Climate change and natural disasters such as global warming, drought, and floods brought about by carbon dioxide emissions will have a major impact on the development of both human society and economies [1,2,3]
Based on the panel data of prefecture-level cities in China from 2005 to 2018, this paper studied the impact of financial development on China’s carbon emission intensity and its mechanism from both theoretical and empirical aspects
Studies have shown that financial development has significantly reduced China’s carbon emission intensity overall
Summary
Climate change and natural disasters such as global warming, drought, and floods brought about by carbon dioxide emissions will have a major impact on the development of both human society and economies [1,2,3]. Sustainability 2021, 13, 11912 carbon emissions while at the same time maintaining economic development, and to achieve a “carbon peak” and “carbon neutrality” at an early date. This has become an important goal for the government in formulating development policies and in improving the quality of economic development. Financial development can promote technological innovation and reduce energy consumption per unit of GDP, thereby reducing carbon dioxide emissions [9]. The possible innovations in this paper are as follows: (1) Explain the impact mechanism of financial development on carbon emissions from three aspects:. We further test whether this role exists in the heterogeneity of urban areas so as to provide a theoretical basis for evaluating the emission reduction effects of financial development
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