Abstract
This paper studies the impact of financial development on carbon emissions in China from 1997 to 2016. First, this paper uses the entropy method to construct a synthetical index to measure the financial development. Meanwhile, a two-dimensional panel framework is introduced to group provinces in the panel analysis. The estimation results of the time series autoregressive distributed lag model show that for China as a whole, there is a weak carbon emissions reduction effect of financial development, whether it is a long-term effect or a short-term effect. The estimation results of the panel autoregressive distributed lag model also support that an increase in financial development suppresses carbon emissions. Although financial development inhibits carbon emissions both in the short run and in the long run, the absolute value of the long-term coefficient of financial development is significantly greater than that of the short-term coefficient.
Highlights
Global warming is undoubtedly one of the most serious challenges facing all countries today
A two-dimensional panel framework is introduced to group provinces in the panel analysis
The estimation results of the panel autoregressive distributed lag model support that an increase in financial development suppresses carbon emissions
Summary
Global warming is undoubtedly one of the most serious challenges facing all countries today. Carbon emissions (CE) become the biggest culprit of climate warming. Under the severe environmental situation, human beings have made their own efforts. The task of improving the global climate and truly realizing a low-carbon economy remains long and arduous. The long-term extensive economic development model makes China bear great environmental costs. Green development has become an important requirement for the construction of a new era. Achieving clean and low-carbon development is an urgent need for economic and social transformation. Faced with arduous environmental problems and energy reform, China has put forward a new vision of innovative, coordinated, green, open and inclusive development. China demonstrates its determination to protect the ecology and build a green and beautiful country
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