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Do natural resources promote carbon neutrality: The role of green finance

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  • Yu, Zhong

Abstract

This study investigates the relationship between carbon emissions and key economic variables in China from 2000Q1 to 2020Q4, using the ARDL method. It reveals that while gross domestic product (GDP) increases emissions, its square inversely affects them, aligning with the Environmental Kuznets Curve (EKC) hypothesis. Natural Resource Rent (NRR) positively impacts emissions, but its combination with green finance yields a mitigating effect.The research's robustness is evident from a high R-squared value of 0.95, a significant F-statistic, and a Durbin-Watson statistic of 2.11, which collectively negate concerns of autocorrelation, serial correlation, heteroskedasticity, and parameter instability. In the short term, all variables maintain their relevance, suggesting equilibrium.This study contributes to the understanding of green finance's interaction with GDP growth, NRR, and carbon emissions in China. It indicates that green finance can offset the adverse environmental effects of NRR. Highlighting the importance of green finance initiatives and policies, this research underscores their role in sustainable development and environmental mitigation, suggesting their criticality in achieving carbon neutrality.

Suggested Citation

  • Yu, Zhong, 2024. "Do natural resources promote carbon neutrality: The role of green finance," Resources Policy, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723011352
    DOI: 10.1016/j.resourpol.2023.104424
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