Exploring carbon neutrality potential in the petroluem industry: The role of green monetary policies as motivators

Abstract

This research conducted a quantitative evaluation of the influence of environmentally focused financial policies on achieving carbon neutrality within China's petroleum industry spanning from 1985 to 2020. Through the application of ARDL (Autoregressive Distributed Lag) analysis, pivotal insights were unveiled. It became evident that green financial strategies significantly bolstered the capacity for achieving carbon neutrality. However, elevated interest rates associated with green loans posed an obstacle to progress. The examination identified a favorable correlation between the adoption of sustainable energy sources and the potential to achieve carbon neutrality, with financial depth playing a constructive role in advancing carbon reduction initiatives. Conversely, investments in conventional petroleum endeavors hindered the pursuit of carbon neutrality. The study advocated for pragmatic policies to expedite the carbon neutrality agenda, such as optimizing interest rates for green loans, enhancing transparency through digitalization of green finance, dedicated funding for advancements in green technologies, and implementing efficient emissions taxes to incentivize and drive carbon reduction efforts.