The impact of green finance on carbon emission reduction efficiency in high-carbon sectors: Evidence from the power sector

Based on panel data of 30 provincial-level regions in China from 2010 to 2022, the carbon emission reduction efficiency in the electricity sector (ECERE) is measured using the Super-SBM-GML model, and the impact of green finance (GF) on ECERE is demonstrated from multiple dimensions, global and local, temporal and spatial, and direct and indirect, using the SLX model and its hybrid model constructed with the PGTWR model. The results show that: (1) GF contributes to the enhancement of ECERE in the region and has a dampening effect on the neighboring regions through spatial spillover effects. When the geographic distance reaches 1950 km, the spatial spillover effect presents a clear geographic decay boundary. (2) Over time, the promotional effect of GF on local ECERE exhibits a U-shaped trend, decreasing and then increasing, while the inhibitory effect on ECERE in neighbouring areas shows a fluctuating and increasing trend. (3) GF's contribution to local ECERE and its inhibitory effect on ECERE in neighbouring regions are more pronounced in areas with limited hydropower and nuclear power resources. (4) GF primarily enhances ECERE through power technology progress, management efficiency improvements, and power structure optimization. The results of this study provide scientific references for improving China's GF policies and energy policies, as well as for promoting the process of carbon emission reduction.