Is China on the right pathway to reduce carbon intensity? Based on green financial development with a novel GDI method

Yaxian Wang, Peishan Han and Yawei Luo

Energy, 2025, vol. 324, issue C

Abstract: How to strike an equilibrium between economic advancement and emission reduction has emerged as a problem in China's green transition. The Carbon Intensity (CI) target can be linked to economic growth, making it more flexible than absolute targets. The Generalized Divisia Index (GDI) has attracted significant interest in quantifying the factors influencing carbon emissions. Nevertheless, few studies have employed GDI to decompose relative variables, such as CI. Moreover, no research has been conducted on green finance using the temporal-spatial GDI model. Thus, a temporal-spatial GDI model has been devised to decompose China's CI. The findings demonstrate that the East (−7.40 %), South (−7.09 %), and Central (−9.70 %) are curbing national CI, while the North (−4.80 %), Northwest (−3.94 %), and Northeast (−5.18 %) lag, percentages demonstrate average annual growth rates (AAGRs) of CI. The temporal decomposition analysis suggests that carbon emissions represent the principal factor contributing to the growth in CI, at 1.02 tCO2/104 yuan. Conversely, the carbon efficiency of green financial development (GFD) is a notable driver of reductions in CI, at −1.67 tCO2/104 yuan. The spacial disintegration analysis manifests that GFD has the most important effect on spatial disparities, from −1.48tCO2/104 yuan to −0.11tCO2/104 yuan in 2021.

Keywords: Carbon intensity; Green financial development; Generalized divisia index model; Temporal-spatial decomposition analysis (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:324:y:2025:i:c:s0360544225013787

DOI: 10.1016/j.energy.2025.135736

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