Nexus between green finance, non-fossil energy use, and carbon intensity: Empirical evidence from China based on a vector error correction model
By Xuedi Ren, Qinglong Shao, Ruoyu Zhong. 2020
446 citations recorded by the source corpus.
Abstract Previous studies have considered the effect of financial development on carbon emissions; however, few studies have explored the role of green finance in carbon mitigation. To bridge this gap, the current study constructs a green finance development index based on four indicators: green credit, green securities, green insurance, and green investment. A vector error correction model is used to analyze relationships between the development level of green finance, non-fossil energy consumption, and carbon intensity using data from 2000 to 2018. We find that China’s green finance industry developed rapidly, and improvements in the green finance development index, as well as the increasing use of non-fossil energy, contributed to a reduction in carbon intensity. Simultaneously, an increase in carbon intensity inhibited the expansion of non-fossil energy use, impeded the investment flow to green projects, and ultimately led to a deterioration of green finance development. In addition, non-fossil energy consumption in China was primarily influenced by green finance and carbon intensity, with clear policy-driven effects. However, the impacts of green finance policies continually fell short and lacked continuity. This study proposes ways in which to improve the effect of green finance policy implementation, expand the consumption of non-fossil energy, and develop a carbon trading market.
Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment
View Paper: https://www.semanticscholar.org/paper/a1695dc9eed791c71d89ae42816cea0b846e0f6d
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In Economics and Econometrics
Citations in the corpus
- Green Finance Development in Bangladesh: The Role of Private Commercial Banks (PCBs) (2021, methodology): “Liu, N.; Liu, C.; Xia, Y.; Ren, Y.; Liang, J. Examining the Coordination Between Green Finance and Green Economy Aiming for Sustainable Development: A Case Study of China.”