Lighting a green future: The role of FinTech in the renewable energy transition.

Abstract

With the severity of global climate change becoming increasingly evident, the shift to renewable energy has become the key to achieving sustainable development. Using data from the prefecture level in China, we construct a comprehensive FinTech index from the institutional and individual levels using the entropy method, aiming to capture the multi-dimensional value of FinTech comprehensively. This paper quantifies the momentum that FinTech provides to the urban renewable energy transition. Our investigation shows that FinTech can play a crucial role in enhancing urban renewable energy transition, especially in cities with strict environmental policies, relatively developed economies, and eastern and midland cities. This study further reveals the impact path of FinTech-driven urban renewable energy transformation, and we find that the key path is to curb capital misallocation, strengthen public environmental attention, and improve green innovation. These results expand the research perspective of renewable energy transition and provide a path choice for China to realize renewable energy transition under the dual-carbon goal.