Do Green Finance and Environmental Regulation Play a Crucial Role in the Reduction of CO 2 Emissions? An Empirical Analysis of 126 Chinese Cities

Fushuai Wang, Wenxia Cai and Ehsan Elahi
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Fushuai Wang: School of Economics, Shandong University of Technology (SDUT), Zibo 255000, China
Wenxia Cai: School of Economics, Shandong University of Technology (SDUT), Zibo 255000, China
Ehsan Elahi: School of Economics, Shandong University of Technology (SDUT), Zibo 255000, China

Sustainability, 2021, vol. 13, issue 23, 1-20

Abstract: Green finance and environmental regulation can reduce CO 2 emissions and promote the sustainability of economic development. Based on panel data of 126 resource-based prefecture-level cities in China from 2005 to 2017, the current study used a dynamic panel data model to empirically determine the CO 2 emission reduction effects of different green finance instruments under different environmental regulatory intensities. The results showed that green finance tools had significant negative effects on the intensity of CO 2 emissions, and green finance can adapt to environmental regulations of different intensities, which cooperated to promote carbon emission reduction. Moreover, in comparison, the debt-based green finance instrument had a stronger effect than the equity-based green finance instrument, and they did not show a coupling relationship. An administrative adjustment in green finance and environmental regulation is required to reduce environmental emissions and to improve sustainable development.

Keywords: green finance; environmental regulation; CO 2 emissions; resource-based cities; dynamic panel model; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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