Green finance, renewable energy development, and climate change: evidence from regions of China

Abstract

In this study, using data from 2010 to 2021, and by utilizing the stochastic impacts by regression on population, affluence, and technology (STIRPAT) theory, and system generalized method of moments, the effect of green financing and deployment of renewable energy on carbon dioxide emissions in China and its provinces were analyzed. The results show that green financing reduces environmental pollution at the country level. Moreover, with a 1% increase in renewable energy consumption, carbon dioxide emission can be expected to decrease by 0.103%. It also demonstrates that green financing has a statistically significant coefficient only in provinces located in the eastern and western regions. Chinese policymakers should incentive policies for provinces in the eastern region of China in order to have a cleaner environment. The central region should be under supportive and pressure policies to move faster along the path to sustainable development.