Abstract
The implementation of green finance is crucial in achieving a reduction in regional emissions. As such, understanding how green finance affects regional emission reduction is essential. Using provincial panel data from 2008 to 2019, we employed the fixed effects model to examine the impact of green finance on regional emission reduction. The empirical results reveal the following: (1) Green finance has a negative effect on sulfur dioxide intensity, and the development of green finance can significantly reduce the emission of regional pollutants. (2) Among the different instruments of green finance, green credit and green investment exhibit more substantial emission reduction effects than green securities and green insurance. (3) The mechanism by which green finance affects regional emission reduction is mainly through the advanced industrial structure and green technology innovation. (4) The development of green finance shows geographical discrepancies: The eastern region of China is more effective in reducing emissions than the central and western regions. To fully maximize the role of green finance in emission reduction, this paper offers pertinent suggestions for strengthening the green financial system, improving the advanced industrial process, increasing investment in green energy technology, and formulating specific development tactics that consider the prominent characteristics of distinct regions.