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The impacts of carbon emissions trading scheme on green finance: evidence from China

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Abstract

China enacted and implemented a carbon emissions trading pilot policy in 2011, and whether this carbon emissions trading scheme (ETS) can promote the development of green finance is crucial to realizing a win–win situation for both environmental and economic performance. Based on the panel data of 30 provinces in China from 2007 to 2019, this study constructs a multi-period double-difference model (DID) to explore the impact of carbon ETS on the development of green finance and uses the spatial Durbin model (SDM) to test whether there is a spatial spillover effect of the carbon ETS on the development of green finance. The results show that (a) the implementation of carbon ETS significantly promotes the development of green finance, and this conclusion still holds through a series of robustness tests; (b) the promotion effect of the carbon ETS on the development of green finance is more significant in eastern and western provinces, non-resource–based provinces, and provinces with a high level of openness to the outside world; (c) industrial structural upgrading and green innovation play pivotal roles in achieving the desired outcomes of carbon ETS; (d) carbon ETS have spatial spillover effects on the development of green finance, with the indirect effects being more significant than the direct effects. The findings of this study can serve as a valuable reference for expediting the establishment of a unified national carbon market and the development of a robust green financial system. This holds immense significance in effectively implementing the “dual-carbon” strategy.

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Funding

This work was supported by the Major Bidding Program of the National Social Science Foundation (20&ZD112) and the National Natural Science Foundation of China (71974139&72374150).

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Authors and Affiliations

  1. School of Public Administration, Sichuan University, Chengdu, 610065, Sichuan, China

    Jing Huang & Zhaoyang Zhao

  2. School of Management, Zhengzhou University, Zhengzhou, 450001, Henan, China

    Guohao Li

Authors
  1. Jing Huang
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  2. Zhaoyang Zhao
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  3. Guohao Li
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Contributions

Conceptualization: Z.Z.; methodology: Z.Z. and H.J.; software: Z.Z. and H.J.; validation: Z.Z. H.J. and L.G.; formal analysis: Z.Z.; investigation: Z.Z. and H.J.; resources: Z.Z.; data curation: Z.Z. and H.J.; writing—original draft preparation: Z.Z. and H.J.; writing—review and editing: Z.Z. and H.J.; visualization: Z.Z. and H.J.; supervision: H.J. and L.G.; project administration: Z.Z.; funding acquisition: H.J.. All authors read and approved the manuscript.

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Correspondence to Guohao Li.

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Huang, J., Zhao, Z. & Li, G. The impacts of carbon emissions trading scheme on green finance: evidence from China. Environ Sci Pollut Res 31, 13780–13799 (2024). https://doi.org/10.1007/s11356-024-32064-z

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