Has carbon finance helped regional energy structure transformation? Evidence from 30 Chinese provinces

In the pursuit of China’s ambitious "dual-carbon" objectives, reshaping the energy landscape has emerged as a pivotal strategy for simultaneously advancing sustainability and fostering robust, high-quality economic growth. In particular, as China's carbon market continues to evolve and mature, carbon financing has emerged as a key factor for accelerating the transition to sustainable regional energy systems. Drawing on panel data spanning 2013 to 2023 across 30 Chinese provinces and autonomous regions, this study uses a mediation analysis approach combined with a system generalized method of moments model to show that carbon finance influences regional energy structure transformation. This finding remains robust under several endogeneity and robustness tests. However, regional disparities exist in how carbon finance drives the transition toward cleaner energy. Compared to the central and western regions, the eastern region exhibits a more stronger effect. Additionally, areas rich in energy resources see a substantially greater impact than those with limited reserves, highlighting the role of natural endowments in shaping outcomes. Further, the impact of energy structure transformation in regions in the latter phase of industrialization is significantly stronger than that in regions in the first and middle stages of industrialization. Mechanism analysis reveals that carbon finance drives regional energy structure transformation through three channels: energy electrification, energy intelligence, and energy digitization. Finally, the main effect exhibits non-linear threshold effects with both environmental governance willingness and carbon intensity. By investigating how carbon finance affects regional energy structure transformation, this study provides insights and decision-making foundations for advancing sustainable development, and achieving China’s dual-carbon objective.