The Impact of Green Credit on Carbon Emission Reduction in China — A Case Study of Six Major Energy-Intensive Industries

Abstract

The development of a high-quality economic system in China critically hinges on green finance, particularly green credit as an integral part of the carbon finance framework. This study analyzes panel data from 30 provinces and municipalities across China between 2008 and 2019, employing a dynamic panel model to explore the impact of green credit on carbon emission reduction in six major energy-intensive industries. Results reveal that green credit significantly curtails carbon emissions within these sectors. Notably, the effectiveness varies regionally, with eastern regions demonstrating superior performance compared to their central and western counterparts. This research underscores the necessity for expanding green credit scale, enhancing support mechanisms, and fostering deeper integration and liberalization of green finance nationwide. Special attention should be directed towards advancing green credit initiatives in central and western regions to achieve balanced development. This study innovatively quantifies regional disparities in green credit efficacy, providing actionable insights for policymakers.