Carbon emission reduction effects of green finance reform and innovation pilot zones policy: evidence from the prefecture-level city in China.

The establishment of green finance reform and innovation pilot zones is an important practical exploration to achieve carbon emission reduction goals through green finance in China. Based on the panel data of 282 Chinese prefecture-level cities from 2006 to 2019, this paper examines the mechanism of China's green financial reform and innovation pilot zone policy (GFRI) on urban carbon emissions (CE) and carbon emission efficiency(CEE) using difference-in-differences model. The study shows that GFRI has a significant carbon emission reduction effect, which is reflected in the significant reduction of urban CE and the improvement of urban CEE. GFRI achieves carbon emission reduction by promoting urban green innovation, while the mediating effect of financial agglomeration has not been verified. The results of heterogeneity analysis show that GFRI has more significant effects on carbon emission reduction in non-resource-based cities, large-scale cities and cities with strict environmental regulation. Financial development and digital infrastructure play a positive moderating role on the carbon emission reduction effect of GFRI. This study provides empirical evidence and policy insights from the Chinese city level for deepening the green finance policy and promoting urban low-carbon development.