An Empirical Analysis On Effect Of Financial Development On Carbon Emissions In China

The current economic growth can no longer be satisfied simply with pursuing high speeds.Instead,we must understand and implement the green-development ideas advocated in the 19th CPC National Congress and move toward the goal of a low-carbon and clean economy.The dramatic increase in carbon dioxide emissions from fossil fuel combustion and cement production will not only bring about greenhouse effect and climate change,but also show that current lagging economic development model is in urgent need of transformation.Existing research shows that economic size,population size,industrial structure,energy consumption structure and efficiency are the basic factors that affect CO2 emissions.At the same time,financial development also plays an important role in the process of carbon emissions,but the path and direction of impact are bilateral.They can both stimulate carbon emissions through economies scale effects and wealth effects,but also promote industrial structure upgrading to a more environmentally friendly stage and the company's research of low-carbon technologies to achieve emission reduction through industrial structure effects and green technological innovation.This article firstly reviews the domestic and foreign scholars' literature on carbon emissions.The most classic and influential research on economic development and environmental protection is the "Environmental Kuznets Curve Hypothesis".This hypothesis holds that there is an inverse U-shaped relationship between the economic development represented by GDP per capita and the discharge of pollutants like SO2.The Kaya identity is also an important thoery,There are also many theoretical and empirical research results on the impact of financial development on carbon emissions.Inspired by the Environmental Kuznets Curve,this paper argues that there may be a similar non-linear inverted U-shape relationship between financial development and carbon emissions.Secondly,this article describes the sources of carbon emissions,the hazards of the greenhouse effect and climate change,and detailed methods for measuring carbon dioxide emissions.Regarding the amount of carbon dioxide emissions,this paper believes that there are deficiencies in the previous measurement methods,considering overlooked carbon emissions released from cement production,omitting repeated addition from secondary energy such as electricity,and considering the burning of tar and other energy at the same time.Therefore,based on the previous research,this paper provides a more comprehensive and accurate method of carbon dioxide emissions measurement.Then it explains the new characteristics of China's financial development,the path of financial development to carbon emissions,and so on.Financial development mainly promotes carbon emissions through economic scale effects and income effects,and carbon emissions are suppressed through industrial promotion effects and green technology innovation effects.In the empirical part,financial development level is divided into four dimensions:FIR,the level of securities market development,financial depth,and financial structure.It uses differential GMM and systematic GMM estimation methods to construct a dynamic first-order provincial panel model to test whether the estimated inverted U-shaped relationship accords with reality.The empirical research results show that there is an inverted U-shaped relationship between the development of credit markets and the direct financing markets such as stocks and bonds,and carbon emissions.The increase in the depth of finance and the optimization of financial structure can always restrain carbon emissions.In addition,this article also optimizes the company's green innovation level indicators.In the past,the measurement of corporate technological innovation can be classified in mainly two ways.First,based on the input end,using the amount of R&D funds or human resources input to infer the level of technological innovation;second,based on the output end,such as the amount of patent or technology contract transactions amounts.But this article thinks neither of these is suitable for green innovation technology.This paper uses green craft innovation and green production innovation to measure the progress capabilities of corporate green technologies.The ratio of industrial pollutant(gas,liquid,solid)emissions to GDP represents the level of green process innovation.The ratio of new product output value to energy consumption represents the level of innovation in green products.Using the differential GMM and system GMM estimation methods to construct a dynamic panel model,it is found that as financial development enters a higher-level stage,green credit and green securities tools rise and flourish,providing financing facilities and professional services so that companies can promote the development of low-carbon and environmentally friendly technologies to suppress carbon emissions.The research in this paper shows that financial development is an important factor affecting carbon emissions.In the early stage of financial development,energy use and pollution emissions may be promoted through the expansion of economic scale and the increase in consumer wealth.However,as financial development enters a higher-level stage,the emergence of green credit and green financial instruments and the optimization of financial structure will promote the tilt of the economic structure towards the tertiary industry,and will also accelerate the R&D and the progress of green innovation technologies,ultimately inhibiting carbon emissions..On the basis of the foregoing analysis,this paper proposes relevant policy recommendations,and believes that green finance should be integrated with the development of green and high-tech industries,provide financial support and professional services for the research and development of clean technologies;foster a standardized green financial market and innovate green insurance,green bonds,green derivatives and other financial instruments.