Green Finance, Biased Technical Progress and Carbon Reduction From the Perspective of Inequality

ABSTRACT The early realisation of carbon peaking and the reduction of carbon peaks in high‐carbon regions are top priorities for achieving ‘dual carbon’ goals. Green finance (GRF) provides an important instrument for strengthening financial support for the low‐carbon transition in high‐carbon regions. This paper examines how GRFs can mitigate carbon inequality from the perspectives of capital‐ and energy‐biased technical progress. The study revealed that the GRF helps reduce carbon emissions and alleviate carbon inequality, as it enhances more active carbon reduction behaviours in high‐carbon regions. The greater the degree of market incentives, environmental protection supervision and carbon inequality, the greater the strengthening of the reduction effect of GRFs on high‐carbon regions, thus narrowing the interregional carbon emission gap. GRF development can significantly improve capital‐biased and energy‐biased technical progress, enhance the advantage of carbon reduction in high‐carbon regions and alleviate carbon inequality. We provide theoretical support for the direction of technical progress by relying on factor endowment advantages.