The Impact of Green Finance on Reducing Carbon Emissions

Abstract

This paper investigates the pivotal relationship between green finance and carbon emissions, recognizing its crucial role in addressing contemporary environmental challenges. Through a comprehensive literature review, the study explores the historical development of green finance since its inception in 2007, emphasizing its growing significance globally and particularly in China. The theoretical analysis dissects various components of green finance, including green credit, securities, insurance, funds, investment, and carbon finance, shedding light on their collective impact on sustainability. The mechanisms and channels through which green finance influences carbon emissions are scrutinized, with a focus on corporate initiatives like Microsoft's carbon-negative goal and its resultant financial benefits. The study concludes with actionable policy insights, advocating for the acceleration of green financial system innovation and the optimization of product structures for sustainable development. This research provides valuable insights for policymakers and businesses navigating the path toward a low-carbon future.