The Impact Of Financial Development On Carbon Dioxide Emissions

With the rapid economic growth,the demand for fossil fuels in production and life and carbon dioxide emissions are also increasing,and the global warming brought about by this issue has received widespread attention from countries around the world so that how to achieve carbon dioxide emission reduction has become a hot topic in the field of energy economy.While carbon dioxide emission reduction involves various aspects such as the development of low-carbon technologies and the optimization of industrial structure,which are inseparable from the financial support,the study on the impact of financial development on carbon dioxide emissions and how to exert the positive role of finance in promoting carbon dioxide emission reduction has made some progress,especially in recent years.This paper builds a dynamic panel model based on the panel data of Chinese 227 prefecture-level cities from 2005 to 2014 to quantitatively analyze the impact of China's financial development on carbon dioxide emissions,adopting financial depth,financial scale and financial intermediary development as proxy indicators for financial development,and we add the square term of economic growth to the model to verify the existence of EKC.In addition,this paper further divides our country into eastern,central and western regions to discuss the impact of financial development on carbon dioxide emissions in different regions.The empirical results are as follows:On the one hand,from a general perspective,China's financial development has little impact on carbon dioxide emissions,the research conclusions of using different indicators to describe financial development are also inconsistent,and we even get the conclusion that there is no statistically significant correlation between the two,which may be attributed to the offset of the technology structure effect and the scale effect.Moreover,there is an inverted U-shaped relationship between economic growth and carbon dioxide emissions,namely,the EKC hypothesis holds in China.On the other hand,from a regional perspective,the financial development in the eastern and central regions has increased carbon emissions while the financial development in the western region has a weak positive effect on reducing carbon emissions,which enriches the existing research conclusions.The mechanism behind it needs further investigation.Moreover,the EKC hypothesis is still established in the eastern part of our country,while not significant in the central part,the economic growth in the western part is beneficial to carbon emission reduction.Finally,combining the conclusions of the study with the reality of our country,we can put forward feasible suggestions for promoting carbon dioxide emission reduction in China's financial development.