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Can financial inclusion facilitate carbon neutrality in China? The role of energy efficiency

Author

Listed:
  • Dong, Jiajia
  • Dou, Yue
  • Jiang, Qingzhe
  • Zhao, Jun
Abstract
With the vigorous popularization of inclusive finance, its carbon emission-reduction effect deserves great attention. For this purpose, we check the spatial effect of financial inclusion on carbon dioxide (CO2) emissions by building a composite index of financial inclusion. After conducting a series of robust tests, we also examine how energy efficiency adjusts and affects the financial inclusion-CO2 nexus. The primary findings highlight that: (i) China's financial inclusion is positively correlated with the greenhouse effect; in other words, increased inclusive finance cannot facilitate carbon emission reduction; (ii) the interaction and synergy between energy efficiency and financial inclusion can effectively weaken the promotion effect of financial inclusion on carbon emissions and enhance the reduction effect of energy efficiency; and (3) in addition to the direct effect, China's financial inclusion can also facilitate greenhouse effect by impeding the innovation of energy technologies. Following the three results, we propose the corresponding policy implications.

Suggested Citation

  • Dong, Jiajia & Dou, Yue & Jiang, Qingzhe & Zhao, Jun, 2022. "Can financial inclusion facilitate carbon neutrality in China? The role of energy efficiency," Energy, Elsevier, vol. 251(C).
  • Handle: RePEc:eee:energy:v:251:y:2022:i:c:s0360544222008258
    DOI: 10.1016/j.energy.2022.123922
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    More about this item

    Keywords

    Financial inclusion; CO2 emissions; Moderating and mediating effects; Energy efficiency; China;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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