The Threshold Effect Of Financial Development’s Impact On Carbon Emissions

In just over 40 years since the reform and opening up,China’s economic construction and financial development have made achievements that have attracted the attention of the world,and China’s international status and people’s living standards have been significantly improved.However,as the world’s second largest economy,China’s carbon emissions have always ranked first in the world,and the extensive economic development model has also seriously threatened the ecological environment.The development of a low-carbon economy and the suppression of carbon emissions are imminent.Suppressing carbon emissions is a complex systemic project affected by many parties,and requires efforts from clean energy development,industrial structure upgrading,and technological advancement.As an important part of the modern economy,finance plays an important role in carbon emission reduction.To begin with,it comprehensively sorts out the connotation and theory of financial development and the influencing factors of carbon emissions.At the same time,it analyzes and summarizes the impact path of financial development on carbon emissions.Finally,it explains the impact of financial development on carbon from three aspects:scale effect,structural effect,and technical effect.The impact of emissions.On the basis of theoretical analysis,financial energy-saving indicators are introduced to analyze the impact of financial development on carbon emissions and link financial development with energy and carbon emissions from the indicator level.Then,using panel data from 22 provinces,4 municipalities,and 4 autonomous regions in Mainland China from 2002 to 2017,based on the logarithmic average Diversity Index Decomposition(LMDI)method to decompose the driving factors of China’s energy consumption carbon emissions,it was found that no matter short-term In the long run,financial energy conservation,financial structure,and financial deepening are all important drivers of carbon emissions.Finally,this article introduces the results of exponential factor decomposition into the multiple threshold effect model to explore whether there is a nonlinear relationship between the three dimensions of financial development and carbon emissions.The study found that the impact of financial energy conservation and funancial structure on carbon emissions has a single threshold effect,that is,there is a non-linear relationship.The difference is that the effect of financial energy-saving efficiency on carbon emissions is first to promote and then to suppress,and the degree of financial structure deepening affects carbon emissions to first suppress and then promote.There is no threshold effect on the impact of financial deepening on carbon emissions,but compared with financial structure and financial deepening,carbon emissions are restrained more significantly.On the whole,financial development is conducive to the development of China’s energy conservation,emission reduction and low-carbon economy.In order to achieve carbon peaks and achieve the goal of carbon neutrality as soon as possible,on the basis of combining theoretical and empirical results,we propose policy recommendations for optimizing energy consumption structure,upgrading industrial structure,technological progress,and actively developing green finance and carbon financial markets.