From coal to code: The transformative role of fintech and renewable energy in China's low-carbon transition

The shift towards carbon neutrality in China can be characterized by two issues, namely maintaining economic growth and minimizing excessive reliance on coal burning and exploitation of natural resources. Although there is a fast growth in renewable energy generation, a low-carbon transition is still impeded by a lack of funds and poor allocation of capital. Since this gap motivates this study, this paper empirically investigates how financial technology (FNT), the use of renewable energy (REC), and natural resource rents (NTR) have influenced environmental sustainability in China. The analysis relies on quarterly data from 2000 to 2020 to include asymmetric short- and long-run impacts of positive and negative shifts in fintech development, renewable energy use, and natural resource utilization on carbon emission. The findings show that positive shocks to fintech development and renewable energy have a strong negative impact on CO 2 emissions in the long and short term, whereas rises in natural resource rent and economic growth have positive impacts on the emission. On the contrary, negative shocks to fintech and renewable energy improve the degradation of the environment, a fact that confirms high asymmetries. These results point to the essential position of fintech in supporting green finance, making capital allocations more efficient, and hastening the process of renewable energy implementation. The paper presents valuable policy insights, including the necessity of combining green financial models and fintech-facilitated climate finance vehicles and specific incentives that will decrease resource-heavy growth and promote carbon neutrality in China by 2060. • Fintech development significantly reduces carbon emissions in China over time period. • Renewable energy expansion accelerates China's transition toward low carbon economy. • Natural resource dependence intensifies environmental degradation across China nation. • Asymmetric effects reveal stronger impacts from positive and negative shocks dataset. • Fintech enabled green finance supports China's 2060 carbon neutrality targets policy.