The Study of Carbon Neutralization Effects with Green Credit: Evidence from a Panel Data Analysis for Interprovinces in China

Giving full play to carbon emission reduction of green credits is essential to achieve carbon neutrality. According to low-carbon pilot policies and the condition of industrial transfer, this paper first sorts those provinces into different research zones. The zones are as follows: (I) the first and second batch of low-carbon municipalities and the first batch of pilot provinces (L1) and other provinces (L2) and (II) strong industry transfer-out zone (STR), weak industry transfer-out zone (WTR), and industrial transfer-in area (TIR). Then, we employ a dynamic panel data model and systematic GMM (SYS-GMM) approach to empirically test the impact of green credit and nongreen credit on carbon emissions. Further, this paper analyzes how to coordinate two types of credits to achieve carbon neutrality. The results show that, first, at the national level, the nexus of green credit and carbon emissions with an inverted U-shaped curve and the current impact of green credit is still in the first half of the inverted U-shaped stage. The achievement of carbon neutrality is associated with the ratio structure of green credit to nongreen credit and the scale of green credit. Second, the achievement of carbon neutrality is with regional heterogeneity. The achievement of carbon neutrality is associated with the scale of green credit in L2 and TIR, but also with the ratio structure of nongreen credit to green credit in L2 and STR. However, the carbon neutralization effects with green credit are insignificant in L1 WTR. Finally, based on those conclusions, this paper puts forwards some suggestions to provide references for the policy formulation of green credits and carbon neutrality.