An Empirical Study On The Impact Of Financial Development On Carbon Emissions

The global warming trend observed since the 1950 s has been confirmed by scientists as the result of excessive emissions of Greenhouse Gas(GHG)in human production and life.Forty years after the reform and opening-up,China's economy has experienced rapid development,making it the second largest economy after the United States.However,it has also directly led to China becoming the world's largest carbon dioxide emission country.Under the pressure of current international and domestic environmental governance,China has a long way to go in carbon emission reduction.In environmental governance,especially carbon emissions as the realistic background,and economic theory in the existing literature on the basis of the context and reference,this article USES 30 provinces in mainland China in 2005-2015 panel data,and by adopting a measuring model of spatial panel,with financial scale and financial efficiency to measure the financial development of a regional level,the efficiency of financial scale,financial impact on carbon emissions intensity launched a comprehensive and in-depth empirical analysis.The innovation of this paper is reflected in that the regression parameters of the spatial panel model do not only indicate the degree of influence of local independent variables on local dependent variables like the classic linear regression results,but also include the influence of local independent variables on the dependent variables in other regions,or the influence of other regional dependent variables on local dependent variables.Therefore,this paper USES partial differential method to decompose the results of model regression and decomposes the impact of financial development on carbon emissions into average total effect,average direct effect and average indirect effect.Average direct effect refers to the direct impact of financial development on local carbon emissions,while average indirect effect refers to the impact of local financial development on carbon emissions in other regions,so as to better understand the impact of financial development on carbon emissions.Moreover,this paper USES two indicators of financial scale and financial efficiency to measure the level of financial development from two aspects of quantity and quality.Empirical findings show that the financial development level measured by these two different indicators has the opposite influence on the carbon emission intensity,which proves that the impact of financial development on carbon emissions is complex,not simple promotion or inhibition,that is,financial development can restrain carbon emissions,but mainly lies in improving financial efficiency.In addition to calculating the average effect,this paper also listed the direct and indirect effects of financial development on carbon emission in 30 provinces and autonomous regions,and analyzed the direct effects and indirect effects respectively.On the basis of the spatial panel model,in this paper,by using the method of partial differential,the effect of financial development on carbon decomposition into direct effect and indirect effect,and obtained the following main conclusions:(1)from the provincial level of carbon dioxide emissions intensity of the global spatial autocorrelation test results,China's carbon dioxide emissions intensity showed significant spatial correlation,and is gradually rising trend.At the same time,according to the Moran scatter diagram,most provinces and regions in China are located in the first and third quadrants and present the feature of "low south and high north",that is,southern cities are dominated by low and low agglomeration,while northern cities are dominated by high agglomeration.(2)in the regression analysis of the spatial panel model,the spatial correlation coefficients are all significantly positive,indicating that the carbon emission intensity has a positive correlation in space,which is consistent with the results obtained from the spatial correlation test.A province of the carbon intensity will be affected by spatial lag or the disturbance to the other parts of the carbon intensity,and presents the positive correlation,namely the improvement of local carbon intensity will promote the area around the carbon intensity increased,it is very clearly explained China's provincial level carbon intensity presents the cause of the high concentration and low concentration.(3)the regression results of the spatial panel model further reveal that there is a significant positive correlation between financial scale and carbon emission intensity.The expansion of financial scale promotes carbon emission intensity.On the contrary,there is a significant negative relationship between financial efficiency and carbon emission intensity.More importantly,the impact of financial efficiency on carbon intensity is greater than that of financial scale on carbon intensity.Therefore,on the whole,the improvement of financial development is conducive to the development of low-carbon economy.(4)the financial scale,financial efficiency of the influence of the carbon intensity is decomposed into direct effect and indirect effect,this paper found that financial scale will not only improve local carbon intensity,also in other parts of the carbon emissions intensity higher,on the contrary,financial efficiency not only suppresses the local carbon intensity,at the same time in other parts of the carbon emissions intensity also have inhibition.(5)both the financial scale and the financial efficiency variables have a greater direct effect than the indirect effect,and both the direct effect and the indirect effect have a greater impact than the financial scale variables.From the perspective of various provinces,the indirect effect on neighboring regions is greater than that on non-neighboring regions,no matter it is financial scale variable or financial efficiency variable,which is consistent with the first law of geography that "everything is related and the closer the distance,the stronger the correlation".(6)in addition to the relationship between financial development and carbon emissions,this paper also found that environmental regulation would promote local carbon emissions and also promote carbon emissions in neighboring regions,which led to the strange phenomenon of "more regulation and more pollution".The industrial structure and openness will also promote the local carbon intensity and the surrounding area carbon intensity;The regional population and per capita patent application will curb the local carbon emission intensity and the surrounding area's carbon emission intensity,which is conducive to the development of low-carbon economy.On the basis of empirical research using spatial panel model,this paper proposes the following policy recommendations :(1)expand the pilot scope of low-carbon cities,encourage more cities to explore and summarize the experience of low-carbon economic development.(2)further improve the trading mechanism of carbon emission rights.While expanding the financial scale,we should pay attention to improving the financial efficiency and enhancing the environmental awareness of financial practitioners.(3)formulate differentiated environmental regulation policies according to local conditions and increase investment in education and scientific and technological innovation,especially in environmental protection.(4)to transform the mode of economic development and achieve sound and rapid economic development is the key.Therefore,we should give full play to the role of finance in promoting economic development,energy conservation and emission reduction,and prevent financial bubbles from harming the development of the real economy.