Can green finance policies reduce energy consumption: quasi-natural experimental evidence from green finance reform and innovations pilot zone

Lu Lv Bingnan Guo ^*

• Jiangsu University of Science and Technology, Zhenjiang, China

Green finance pilot policy is one of China's important green finance pilot policies, which is of great significance to further reduce China's energy consumption and promote the implementation of the major strategic decision of "carbon peak and carbon neutral" under the new development pattern. The research is based on the panel data from 30 provincial-level administrative regions in China from 2013 to 2021, with the establishment of green financial reform and innovation pilot zones as a quasi-natural experiment. Considering that different cities carry out green financial reforms at different times, a more realistic staggered difference-in-difference model (staggered DID) is constructed to analyse the impact of green financial reform policies on energy consumption and the mechanism of its mediating effect. The paper results show that:(1) The pilot zones for green finance reform and innovations policy significantly reduces the level of energy consumption and has a significant energy-saving effect. This conclusion still holds after a series of robustness tests. (2) Mechanism analysis reveals that the pilot zones for green finance reform and innovations policy mainly relies on optimizing the industrial structure and increasing green innovation, which effectively reduces the energy consumption level of the pilot zone. This paper provides new evidence for a comprehensive understanding of the impact of pilot zones for green finance reform and innovations policy on reducing the energy consumption levels, and offers a reference for further unlocking the energy saving potential of pilot zones for green finance reform and innovations policy.