Research On The Relationship Between Financial Development And Carbon Emission

Carbon dioxide and other greenhouse gases emissions have caused global warming, which is the major challenge for humanity. Governments have to control carbon emissions to slow global warming. On 25/11/2009, Chinese government promised to the world: China’s carbon dioxide emissions per unit of GDP in 2020 will reduce by 40%-45% compared with 2005’s. On 12/11/2014, Chinese government declared the common action to global climate change, planning to reach the peak of carbon dioxide emissions in 2030. Previous studies suggest that technological progress is an important factor to promote the growth of carbon dioxide emissions. I make efforts to study the relationship between financial development and carbon dioxide emissions.In this paper, i account the carbon dioxide emissions since the reform and opening up to the world.Our country’s energy consumption, carbon dioxide emissions and economic growth are highly correlated. Carbon dioxide emissions in 2012 increased by more than six times, compared with 1980’s.For our country’s provinces other than XiZang, form 2005 to 2012, carbon dioxide emissions maintain growth, the carbon dioxide emission intensity maintains decline. Carbon dioxide emission intensity is different to a large extent. The study shows that the level of financial development of our country has improved, which are different in different provinces.I use 30 provinces’ sample data, from 2005 to 2012, to do the study. Using panel model, i treat carbon dioxide emissions, carbon dioxide emission intensity as the dependent variable, treat the level of financial development as the explanatory variable. Population and economic development level are control variables. The study shows that financial development can reduce carbon dioxide emissions and carbon dioxide emission intensity. Research on subsamples of eastern, central and western regions shows that financial development in eastern region has no relationship with carbon dioxide emission intensity, financial development in central region and central region will reduce carbon dioxide emission intensity.Finally, i propose to promote development of capital markets, and make a suggestion to build a national carbon emission trading market.