Has green finance boosted regional electricity consumption? Based on nighttime light data

Green finance is gradually becoming essential to enhancing regional electricity consumption. This paper uses panel data from 30 Chinese provinces and regions from 2011 to 2021 and develops a system Generalized Method of Moments (GMM) and a mediating effect model to test the effects of green finance on regional electricity consumption level and the mechanism of action. The results show that green finance significantly boosts regional electricity consumption level, which still holds after various robustness tests. In terms of heterogeneity, the promotion effect of green finance on electricity consumption is significantly more substantial in the Eastern regions than in the central and western regions; the regions with a higher level of urbanisation are more robust than those with a lower level of urbanisation, and the regions with a higher level of the advanced industrial structure are stronger than those with a lower level. In terms of impact mechanisms, both foreign direct investment and green technology innovation have partial mediating effects on the impact of green finance on regional electricity consumption level. Green finance raises the level of regional electricity consumption by increasing the level of green technology innovation. At the same time, foreign direct investment has a “substitution effect” on the impact of green finance on regional electricity consumption. Therefore, it is essential to increase green financial policy support to raise regional electricity consumption, help upgrade electricity consumption, and help achieve the “double carbon goal”.