No abstract

Given the release of China's green financial policy, this paper constructs a quasi-natural experiment to investigate the impact of such policy on urban carbon emission efficiency and its impact mechanism. In 2016, seven ministries including the People's Bank of China jointly issued the Guidance on Building A Green Financial System, a milestone of the establishment of a more comprehensive green financial policy system in China. However, it is not a straight determinant of improved efficiency of carbon emissions. Based on the empirical panel data of 283 prefecture-level cities from 2011–2020, we adopted a DID model to examine the effect of green financial policies on urban carbon emission efficiency, where the treatment and control groups were divided according to their degrees of dependence on energy as influenced by green financial policies. The results indicated that green financial policies significantly and sustainably improved the carbon efficiency in these cities. Our mechanism further revealed that such improvement was achieved by technological innovation, accelerated industrial restructuring, and reduced energy consumption.