Can Green Bonds Finance a Low-Carbon Transition in a Developing Region? Evidence from Henan, China

Driven by policy guidance and market demand, China’s green bonds have developed rapidly, emerging as a crucial tool for advancing green finance and underpinning the nation’s low-carbon economic transition. This study focuses on Henan — a densely populated province in Central China with important industrial and agricultural production. To address a core question: Can green bonds finance low-carbon transitions in developing regions? Henan plays a vital role in China’s industrial and agricultural economy, yet it grapples with structural challenges: its economy remains dominated by traditional industries, while social development faces substantial environmental pressure — particularly as high-pollution sectors (e.g., coal, steel) encounter difficulties in shifting to green practices. To alleviate the financing of bottlenecks which hinder its industrial low-carbon transition, Henan has actively explored green bond issuance, seeking to balance and synergize economic, social and environmental benefits. Employing statistical analysis and empirical case studies, this research examines three key dimensions of Henan’s green bond development: its current status, multidimensional benefits and existing risks. The findings not only provide theoretical support and practical recommendations for optimizing Henan’s green financial system but also offer fresh insights for regional sustainable development and industrial low-carbon transitions. Ultimately, this study contributes to the realization of China’s “Beautiful China” initiative and the implementation of the new “green” development philosophy, while shedding light on the viability of green bonds as a low-carbon financing tool for developing regions.