Green Finance in China: Development and Impact Analysis

Zheng Fang, Youngho Chang and Yinghui Yu

Chapter 3 in Green Finance and Sustainable Development Goals, 2024, pp 57-89 from World Scientific Publishing Co. Pte. Ltd.

Abstract: China’s green credit balance has grown at a compound annual growth rate of 14 percent between 2013 and 2021, and its green bond market has seen a growth rate of 22 percent during the period 2016–2021. The Chinese carbon market, though developed much later, has become the world’s largest carbon market since its nationwide market opened in July 2021. With the backdrop of fast development in green finance, this chapter reviews the policies of green finance development in China, focusing on the three areas of green credit, green bonds, and the carbon market. We empirically analyze the relationship between green finance development, carbon emissions, renewable energy, fossil fuel energy, and economic development, using data from 2000 to 2018. Green finance appears to stimulate renewable energy and economic development, but its effect on reducing carbon emissions may take more time to be seen.

Keywords: Green Finance; Financial Development; ESG Performance; Climate Change; Climate-Vulnerable Asian Countries; Environmental Disclosure in Financial Institutions; Environmental; Social; and Governance Issues in Corporate Valuation; Financing Renewable Energy; Gross Ecosystem Product; Green Banking Disclosures; Climate-Related Risks; Green Banking Disclosures; Development and Impact Analysis (search for similar items in EconPapers)
JEL-codes: Q01 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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