How does green finance affect carbon emission intensity? The role of green technology innovation and internet development

Abstract

Exploring the impact of green finance (GF) on carbon emission intensity (CEI) is crucial for comprehending sustainable economic development. This study thoroughly examines the influence of GF on CEI across 251 Chinese cities from 2011 to 2020. Employing the entropy method, we constructed a GF development index and applied kernel density estimation to examine the evolution of GF and CEI. The study integrates mediating effect models with spatial Durbin models to elucidate the spatial spillover effects and the complex underlying mechanisms of GF's impact on CEI. The results indicate a disparity in GF among different cities and a concomitant decrease in CEI, emphasizing the efficacy of green policies and industrial transformation. Importantly, GF is observed to substantially lower CEI, demonstrating significant spatial spillover effects. This conclusion remains valid after a series of robustness tests, including IV estimation, replacing the dependent variable, and eliminating outliers. The study identifies green technology innovation (GTI) as a critical mediator in the GF-CEI nexus, while also showing that internet development (INT) has a masking effect. Policy recommendations include enhanced regional cooperation, incentivizing green technology innovation through financial institutions, aligning GF with stringent environmental regulations, and formulating region-specific GF policies that comprehensively address environmental concerns.