How to utilize financial instrument to deal with environmental issues has been a focal topic. Taking the introduction of green credit program as a “quasi-natural experiment,” the propensity score matching and difference-in-difference approach (PSM-DID) are used to investigate the impact of the green credit policy implemented by Chinese government on firm-level industrial pollutant emissions. The estimation results indicate that the green credit policy significantly reduces corporate sulfur dioxide emissions. Heterogeneity analysis shows this impact is more pronounced for large-scale enterprises and enterprises located in the eastern region. The estimated mediation models reveal that after the implementation of the green credit policy, reduction in sulfur dioxide emissions can be attribute to the increased environmental investment and improved energy consumption intensity. Moreover, the green credit policy is also significantly effective in mitigating the discharge of other common industrial pollutants. Our findings highlight the importance of green credit policies in achieving greener industrial production and more sustainable economic development.

With the improvement of inclusive financial system, China’s economy has made significant development and growth. It worth in-depth investigation on environmental impact of financial inclusion, since growing GDP usually accompanied by more intensive carbon emission. This paper aims to reveal whether financial inclusion contributes to the carbon reduction in China using county-level dataset. A fixed-effect panel regression approach is adopted to examine the impact of financial inclusion on county-level regional carbon emissions. The estimation results imply that financial inclusion plays an important role in reducing carbon emissions. The mediation effect analysis reveals two channels through which financial inclusion imposes negative impact on the level of regional carbon emissions. One is to elevate the carbon sequestration capacity by increasing vegetation coverage, and the other is to improve the industrial structure through enhanced financial support. In addition to being a bridge between economic opportunity and output, financial inclusion can also act as an effective measure for addressing climate change.

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