Can the development of digital financial inclusion curb carbon emissions? Empirical test from spatial perspective

As digital finance ushers into a new era, carbon emissions in China have been peaking, highlighting the necessity of carbon neutrality. This work uses a dynamic spatial Durbin model, combined with a mediating effect model of the data from 30 provinces from 2011 to 2019, to explore the impact, transmission paths, and spatio-temporal heterogeneity of digital finance (Df) on carbon emission intensity (Cg). Meanwhile, the validation explores the mediating role of technological innovation (Rd), industrial restructuring (Is), and entrepreneurial effects (Es) in the process of digital finance influencing green low-carbon development. The empirical results show that: first, digital finance (Df) has a promoting effect on regional CO 2 reduction capacity (Cg), and this conclusion still holds under multiple robustness tests; second, digital finance (Df) can promote the regional CO 2 reduction capacity (Cg) through two paths, namely, promoting technological progress (Rd) and optimizing industrial structure (Is); third, the impact of inclusive digital finance on CO 2 emission intensity is heterogeneous. By analyzing regions with different economic development levels, we found that digital inclusive finance in the eastern region can enhance CO 2 reduction capacity, while in the central and western regions, the impact is not significant. Given this situation, China, to achieve carbon neutrality, should boost financial development’s ability to reduce carbon emission, promote technological progress, and optimize the industrial structure, thus forming a green and low-carbon economic cycle. This paper fills the research gap on how digital finance can effectively promote green development while exerting economic effects, and at the same time, enriches the literature on factors influencing green and low-carbon development.