Exploring the impact of sustainable finance on carbon emissions: Policy implications and interactions with low-carbon energy transition from China

With the increasing attention to environmental degradation and sustainable development goals, the low-carbon energy transition has emerged as a focal point in both academic and political realms. This research examines, under the framework of the Environmental Kuznets Curve, the impact of low-carbon energy transition, natural resource rents, and economic growth on environmental performance. Additionally, it delves into the regulatory role of green finance and transition finance in the nexus between low-carbon energy transition and environmental performance. The research findings reveal that the influence of low-carbon energy transition, economic growth, and natural resource rents on environmental performance exhibits distinct regional heterogeneity. The research also verifies the premise that the Environmental Kuznets Curve exists exclusively in the eastern area of China. Further investigation indicates that sustainable finance plays a crucial regulatory role in the relationship between low-carbon energy transition and environmental performance. According to these results, the paper suggests that provinces should establish dual environmental and economic goals and optimize financial policy design. Moreover, governments and enterprises should achieve sustainable development goals through means such as technological innovation, regulatory frameworks, and market mechanisms.