Green digital finance and energy transition: Considering the differentiating role of regional policy uncertainty

Abstract

Green digital finance (GDF) and policy uncertainty are critical to the energy transition and energy security. This study measures the level of GDF and the state of energy transition in Chinese cities from 2011 to 2020, and develops linear probability and moderating effect models to excavate the role of GDF on energy transition, and tests the moderating effect of regional policy uncertainty. The study finds that: (1) GDF increases the possibility of energy transition in cities, especially those with fluctuating transition. (2) Climate policy uncertainty does not affect GDF support for energy transition, while economic policy uncertainty dampens GDF support for energy transition, and this inhibitory effect is more pronounced in cities with fluctuating transition. (3) GDF accelerates the energy transition through venture capital, R&D investments, green innovation and industrial upgrading mechanisms. (4) Cities with higher levels of digital infrastructure and financial specialization, and greater financial regulation and environmental protection, as well as cities in the eastern region, are more likely to benefit from GDF contributions to the energy transition.