Abstract
Against the backdrop of global climate change and slowing economic growth, nations are urgently seeking strategies to both stimulate economic recovery and reduce carbon intensity (CI). In this context, China has prioritized the expansion of green finance as a pivotal mechanism for fostering green transformation and securing sustainable growth. This study delves into the effect of green finance on China's CI. Employing an empirical analysis across 30 Chinese provinces from 2007 to 2020, this paper leverages the entropy method to forge a comprehensive green finance indicator. The findings show green finance diminishing CI, predominantly driven by green innovation and industrial structure. Further examination using the threshold effect model reveals a pronounced threshold impact of green innovation and industrial structure on the efficacy of green finance in reducing CI, with the inhibitory effect of green finance peaking within an optimal threshold range. The heterogeneity test reveals that, compared to the western and northeastern regions, green finance has a more pronounced inhibitory effect on CI in the eastern and central regions. The research findings of this paper provide a perspective on how green finance facilitates the reduction of regional CI.