Exploring the nexus of green finance and renewable energy consumption: unraveling synergistic effects and spatial spillovers

As China transitions towards a green and low-carbon energy system, it is crucial to have the support of green finance. In this study, we explore the effects of synergy and spatial spillovers in the development of green finance and the consumption of renewable energy. By taking a synergistic perspective, we aim to provide new insights for energy structure reform. We use a spatial simultaneous equations model in combination with a three-stage generalized spatial least squares approach, our findings are the following: firstly, there is a positive synergy between the development of green finance and the consumption of renewable energy. Secondly, there are positive spatial spillovers in the development of green finance and the consumption of renewable energy, but the regional interaction effects of green finance development on renewable energy consumption are negative. Furthermore, we observe that the impact of renewable energy consumption on green finance development has been increasing since 2013. However, the reverse relationship is not true, indicating that the renewable energy industry has stabilized and is gaining appeal in financial markets. Our study highlights that the development of green finance can promote an increase in renewable energy consumption through the facilitation of economic growth, green technology innovation, and the upgrading of the industrial structure. We emphasize the importance of regional and industrial coordination to create synergy between green finance development and renewable energy consumption.