Explaining and modeling the impacts of inclusive finance on CO2 emissions in China integrated the intermediary role of energy poverty

Inclusive finance has the potential to impact CO2 emissions resulting from energy activities by influencing regional economic behavior. To explore this relationship, this research makes use of panel data covering 30 Chinese provinces between 2004 and 2017. Through the utilization of empirical methods, including the dynamic panel model, the DIFF-GMM model, the mediating effect model, and the moderating effect model, the study examines the direction and mechanisms of the influence of financial inclusion on various aspects of CO2 emissions in China. The findings demonstrate that the development of inclusive finance has a significant effect on CO2 emissions, characterized by an energy rebound effect. This effect is primarily observed through notable increases in total CO2 emissions and per capita CO2 emissions, coupled with a reduction in CO2 emission efficiency. Additionally, inclusive finance exhibits a certain capacity to mitigate CO2 emissions by addressing energy poverty. However, this mitigating effect falls short of fully offsetting the CO2 emissions resulting from the overall economic impact of inclusive finance. Moreover, the study reveals that market regulation weakens the positive relationship between financial inclusion and CO2 emissions. Furthermore, the impact of financial inclusion on CO2 emissions exhibits a spatial spillover effect, wherein it serves to inhibit CO2 emissions in neighboring regions.