How much does financial inclusion contribute to renewable energy growth? Ways to realize green finance in China

Renewable energy is regarded as an effective method to alleviate environmental pollution and accelerate the green transition in China. This paper systematically investigates the impact of financial inclusion on renewable energy demand by using S-GMM model based on provincial data in the green finance era. This paper also an-alyzes the asymmetry, heterogeneity, and mediating mechanism in the nexus between financial inclusion and renewable energy demand, and highlights the following findings: (1) Improved financial inclusion can promote renewable energy development in China and present the characteristics of green finance; (2) the impact of financial inclusion on renewable energy demand is asymmetric and heterogeneous; specifically, this impact is much higher in northern China and the regions with higher renewable energy development; and (3) wind and photovoltaic power generation are effective mediators between financial inclusion and renewable energy in-dustry, while the mediation effects of hydropower and nuclear power are not significant. New evidence in this study is presented for the achievement of green transition in China, as well as practical policy implications for improving financial inclusion and increasing renewable energy consumption. For instance, fiscal and tax in-centives and green investment subsidies in the renewable energy sector need to be further improved.

Automated summary

This paper systematically investigates the impact of financial inclusion on renewable energy demand in China, highlighting the characteristics of green finance. The study finds that improving financial inclusion can promote renewable energy development, with asymmetric and heterogeneous impacts. Wind and photovoltaic power generation serve as effective mediators between financial inclusion and renewable energy, while hydropower and nuclear power do not show significant mediation effects.