The impact and mechanisms of green finance on agricultural carbon emissions in China

Under the constraints of global climate change and China’s “dual carbon” goals, it is of significant theoretical and policy importance to examine whether green finance (GF)—an environmental regulation tool driven by market mechanisms—can effectively penetrate the agricultural sector, which is characterized by pronounced financial exclusion, and thereby achieve carbon reduction. This study systematically investigates the impact of GF on agricultural carbon emissions (ACE) and its underlying transmission mechanisms. Based on panel data from 31 provinces in China spanning 2000–2024, this paper constructs a comprehensive GF index. First, this study employs a two-way fixed effects model for the baseline regression. Building on this, it examines the relationship between GF and ACE from three dimensions: pollution constraints, technological innovation, and structural upgrading. The results show that: (1) the level of GF development is significantly and negatively associated with ACE. Taking the final specification as an example, a 0.1-unit increase in the GF index is associated with an approximately 7.8% decrease in ACE; (2) GF may affect ACE through pollution constraints, technological innovation, and structural upgrading; and (3) the regional heterogeneity analysis indicates that the emission-reduction associations are significant in both eastern and western regions, with no statistically significant difference between them, while the effect is relatively weaker in the central region. In addition, the marginal effect related to the level of economic development exhibits relatively strong stability. Based on these findings, this study suggests that China should continuously improve a targeted GF instrument system for agriculture, implement differentiated regional policy support, strengthen financial incentives for agricultural green technology R&D, and promote coordinated industrial structure upgrading, so as to fully leverage the institutional role of GF in facilitating low-carbon transformation in agriculture.