Time-frequency dependence between fintech and development of carbon neutrality under climate policy uncertainty in China: implications for the ocean carbon sink market

Abstract

PurposeThis paper explores whether fintech paves the way for the transition to carbon neutrality in the context of China’s climate policy uncertainty (CCPU) and the influence of the ocean carbon sink market.Design/methodology/approachWe apply a novel wavelet analysis technique to investigate the time-frequency dependence between the CCPU index, the CSI (China Securities Index) Fintech Theme Index (CFTI) and the Carbon Neutral Concept Index (CNCI).FindingsThe empirical results show that CCPU and CFTI have a detrimental effect on CNCI in high-frequency bands. Furthermore, in low-frequency domains, the development of CFTI can effectively promote the realization of carbon neutrality.Practical implicationsOur findings show that information from the CCPU and CFTI can be utilized to forecast the movement of CNCI. Therefore, the government should strike a balance between fintech development and environmental regulation and, hence, promote the use of renewable energy to reduce carbon emissions, facilitating the orderly and regular development of the ocean carbon sink market.Originality/valueThe development of high-quality fintech and positive climate policy reforms are crucial for achieving carbon neutrality targets and promoting the growth of the marine carbon sink market.