Can Digital Finance Promote Peak Carbon Dioxide Emissions? Evidence from China

This paper uses Chinese provincial panel data from 2011 to 2019, measures CO(2) emissions of provinces in China using the IPCC method, and explores the impact of digital finance on CO(2) emissions through the SAR model and SDM. Empirical study shows that digital finance significantly reduces CO(2) emissions. Digital finance reduces CO(2) emissions by promoting energy industrial structure transformation and spreads to surrounding areas through spillover effects, contributes to increasing green patents granted and thus reduces regional CO(2) emissions, advances the green technological progress and therefore inhibits CO(2) emissions, but reduces the green technological progress in surrounding areas and increases CO(2) emissions due to the siphon effect. With the development of digital finance itself, the higher the level of financial regulation, green development and the green finance index, the better the effect of digital finance on CO(2) emission reduction. Additionally, digital finance significantly reduces CO(2) emissions in the south of China.