Green finance is key in supporting industries’ green transformation and helping achieve low-carbon economic(LCE) development. This study creates an index of low-carbon economic development with provincial panel data from 2011–2020 and analyzes the enhancement effect of green finance policies (GFP) on low-carbon economic development and mechanism analysis using a synthetic control method (SCM) based on the creation of the first five provinces participating in the national green finance pilot program in 2017 as a nearly natural test. The empirical findings indicate that the implementation of GFP has a considerable beneficial effect on the growth of the LCE of Zhejiang, Jiangxi, Guangdong, and Guizhou. Meanwhile, Xinjiang's level of LCE development is not severely impacted by the pull-up effect, and both the validity and robustness tests are satisfied by all the empirical findings. The results of the mechanism analysis indicate that making a green financial reform and innovation pilot zone can improve the LCE development by improving the pilot zone’s scientific and technological innovation capacity. Finally, the foundation of the pilot zone for green financial reform and innovation, and policy implications for the further development of an LCE are proposed.

Green nance is key in supporting industries' green transformation and helping achieve low-carbon economic(LCE) development. This study creates an index of low-carbon economic development with provincial panel data from 2011-2020 and analyzes the enhancement effect of green nance policies (GFP) on low-carbon economic development and mechanism analysis using a synthetic control method (SCM) based on the creation of the rst ve provinces participating in the national green nance pilot program in 2017 as a nearly natural test. The empirical ndings indicate that the implementation of GFP has a considerable bene cial effect on the growth of the LCE of Zhejiang, Jiangxi, Guangdong, and Guizhou. Meanwhile, Xinjiang's level of LCE development is not severely impacted by the pull-up effect, and both the validity and robustness tests are satis ed by all the empirical ndings. The results of the mechanism analysis indicate that making a green nancial reform and innovation pilot zone can improve the LCE development by improving the pilot zone's scienti c and technological innovation capacity. Finally, the foundation of the pilot zone for green nancial reform and innovation, and policy implications for the further development of an LCE are proposed.