Understanding the role of green finance and innovation in achieving the sustainability paradigm: application of system GMM approach

THe central challenge facing China's sustainable development is how to strike a balance between economic growth and environmental conservation. In China's ongoing economic revolution, green finance is more important than ever. The study empirically examined how green finance and innovation affect carbon emissions using panel data from 30 Chinese provinces gathered between 2010 and 2020. The empirical analysis is undertaken to utilize a series of methods to investigate the impact of green finance on carbon emissions. The findings show that increased green finance, innovation, and industrial structure reduce carbon output. Moreover, carbon emissions increase with increasing trade openness and economic growth. In order to achieve sustainable development goals through economic and environmental sustainability, it has been discovered that green finance can foster green technology innovation and green business.