Banking sectors and carbon neutrality goals: mediating concern of financial inclusion

Since industrialization, GHGs have steadily grown, and climate change threatens human civilization. The Chinese government actively engages in the administration of the global environment and has suggested that carbon neutrality be attained by 2060. Regional communities must understand their current carbon neutrality status and objectively design a course to attain carbon neutrality due to significant regional development disparities. This research uses a GMM model in order to investigate the effect of the banking sector and financial inclusion on carbon neutrality for 30 provinces in China for the period of 2000–2020. The following are the key conclusions: (1) clean and efficient energy use, primarily reflected by carbon emissions intensity, carbon dioxide emissions per capita, and coal expenditure per capita, had the most significant influence on attaining carbon neutrality. (2) In terms of energy, economics, and environmental considerations, water consumption per capita, the volume of technology distribution, and carbon pollution intensity were the elements that had the most significant impact on carbon neutrality. (3) The provinces might be categorized into three groups depending on their ability to become carbon neutrality, with developed economies having an easier time doing so than resource-dependent provinces. Financial inclusion should also be increased in order to achieve long-term sustainability of the environment. The findings stand up well to both immediate and long-term policy consequences. The sustainable development goals (SDGs) of the United Nations (UN) are supported by this research.