The Influence of Green Finance on “Dual Carbon” Goals: Analyzing the Functions of Government and Market

Building an ecologically sustainable civilization and promoting green development not only make up the new motive power for China’s economic growth but are also an inevitable choice for achieving the “Dual Carbon” goal. This paper draws on the results of China’s provincial panels from 2012 to 2021 and constructs a thorough assessment index system for green finance that includes five dimensions: standardized system, disclosure of information, policy incentives, products and market, international cooperation. The influence mechanism of green finance on the realization of the “Dual Carbon” goal is revealed based on both quantity and caliber perspectives of green technological innovation, and the governments’ and markets’ regulating roles are analyzed. The study’s findings imply that (1) green finance facilitates the achievement of the “Dual Carbon” goal; (2) green finance helps to achieve the “Dual Carbon” goal by boosting green technology innovation and, compared with strategic green innovation, the effect of substantive green innovation is more significant; and (3) government support and increased marketization can bolster green finance’s contribution to accomplishing the goal. This study not only theoretically breaks through the limitations of the existing green finance evaluation index but also expands the single “quantity” channel of the impact of green finance on carbon emissions to a more comprehensive “quantity” and “caliber” channel, and also provides countermeasures and guidelines for how to better play the “synergy” of the government and the market in the practice of green finance.