Abstract
Green finance (GF) is recognized as a key driver of sustainable development. While existing studies have extensively discussed the relationship between GF and the Sustainable Development Goals (SDGs), few have explored the coupling coordination relationship between GF and SDGs. In this paper, we use data from thirty Chinese provinces (municipalities and autonomous regions) from 2008–2021 to examine the degree of coupling coordination development (CCD) between GF and the SDGs systems using the CCD model. We find that most SDGs and their sub-goals exhibit a significant upward trend, except for SDG8, 14–16. GF presents a fluctuating upward trend, with a significant decline in 2010 and 2019. The CCDs between GF and SDGs and their sub-goals generally show an M-shaped upward trend in most regions, with most of them experiencing a synchronous decline in 2011–2012 and 2019. In the analysis of regional heterogeneity, the eastern region performs better in SDG8–9, the central region performs better in SDG3, 14–15, while the western region performs better in SDG7. This paper provides empirical evidence for a further in-depth understanding of the relationship between GF and SDGs, which can contribute to advancing GF development and the SDG process.
Introduction
At the United Nations Sustainable Development Goal Summit in 2015, 193 member states of the United Nations formally proposed 17 Sustainable Development Goals. The goals aim to adopt a systematic and comprehensive approach to solve development problems in the three dimensions of society, economy and environment from 2015 to 2030, and to promote economic and social transitions towards sustainable development. In order to promote sustainable development, financing methods such as green finance1,2,3, climate finance4,5, and green funds6 have been proposed internationally. Countries around the world generally believe that green finance is an interdisciplinary field of finance and the green economy, aimed at combining financial behavior with environmental protection, supporting environmental improvement, addressing climate change, and conserving resources7,8. Compared to traditional financial activities, green finance places more emphasis on the harmonious and balanced development of economic activities and the ecological environment9, effectively alleviating environmental degradation, climate change and poverty10,11, promoting sustainable energy development12,13,14, and ultimately achieving the SDGs. In COP27, countries agreed to establish a “Loss and Damage” fund to support vulnerable countries facing climate disaster, which was a breakthrough for both green finance and climate governance. The final agreement emphasized the necessity of investing 4–6 trillion dollars annually in renewable energy up until 2030.
Green finance sprouted in 1974 in Federal Germany, where the world’s first policy-based environmental bank was established, introducing the idea of environmental protection into the operating guidelines of financial institutions. China first proposed the use of leverage to combat environmental pollution in 1981, and the environmental problems faced in economic development gave rise to the prototype of green finance in China. Subsequently, China’s green finance has developed steadily, and in 2016 China added green finance to the G20 issues. In the same year, the People’s Bank of China, the Ministry of Finance and seven other departments jointly issued the Guidance on Building a Green Financial System, marking China’s emergence as the first country in the world to have a relatively complete green financial system. China has set up seven provinces (autonomous regions) and ten pilot zones for green financial reform and innovation since 2017. As a leading country in international cooperation on green finance, China has pushed green finance to become a global issue, promoted the development of green finance along the Belt and Road, continued to play an important role in international cooperation, and made positive efforts to address climate change and promote sustainable development.
We introduce the coupling coordination degree model (CCD) to assess the complex interactions between green finance and the SDGs. Coupling refers to the phenomenon where two or more elements or systems influence each other through interaction, emphasizing the development from disorder to order among systems. Coordination refers to the elements or systems being in harmony and working well together, emphasizing the narrowing of the gap between the elements as the system moves and develops. Coupling coordination emphasizes the degree of coordination between the internal elements of the system that interact and couple with each other in the process of system movement and development, which determines the trajectory of the integration of the green finance-sustainable development goal system from disorder to order.
A growing body of research has explored the relationship between green finance and SDGs, mainly focusing on the following aspects: (1) the relationship between green finance and individual sub-goals, including poverty, infrastructure, energy security, environmental protection, agricultural development, education, and economic development, among others11,12,13,14,15,16,17,18,19,20,21. (2) The impact of green finance on SDGs, including its effects on environmental sustainability, energy sustainability, agricultural sustainability, education sustainability, economic sustainability and other Sustainable Development Goals2,13,21,22. (3) The indirect channels through which green finance affects the SDGs. Green finance can promote green technology innovation and the development of green enterprise, accelerate the transition from traditional energy consumption, mitigate environmental pollution and climate change, and regulate the relationship between innovation and the energy environment to achieve the SDGs15,23,24. Previous studies have primarily focused on the mechanisms and effect sizes of green finance on the SDGs, with the object of study mostly being the overall SDGs or one of the 17 SDG subgoals. However, fewer studies have examined the coupling and synergy between green finance and the SDGs and their sub-goals. There is thus a lack of research on the coupling and coordination relationship between green finance and the sub-goals of the SDGs.
To address the significant knowledge gap, we explored the coupling coordination relationship and the coordinated development effect between China’s green finance and the SDGs. We delve into the development of green finance and the SDGs in China, examining coupling and synergistic development across both time and space dimensions, and provide theoretical advice for further constructing green finance and the SDGs in China. Since the reform and opening up, China’s economy has developed rapidly, becoming the world’s second largest economy25, as well as the largest energy consumer and carbon emitter26. Therefore, transitioning towards sustainable development while developing the economy is one of the biggest challenges faced by China and other regions globally. Meanwhile, China’s green financial development is at the forefront globally, with the scale of China’s green credit ranking first in the world and green bond issuance maintaining the second place in the world. Therefore, assessing the coupling coordinated development relationship between China’s green finance and the SDGs can provide valuable information for the green finance and sustainable development of countries worldwide.
In this study, we addressed the following questions: (1) What is the level of development of green finance and SDGs in China? (2) What is the coupling coordination relationship between China’s green finance and the SDGs? (3) Is the coupling coordination development of green finance and SDGs different in China’s different regions? To answer these questions, we first used the entropy method to calculate the green financial system index and the scores of each SDG sub-goal. Then we constructed the coupling coordination degree model to assess the coupling coordination relationship between China’s green finance and the SDGs sub-goals and explore the coupling synergy between green finance and each SDG sub-goal from the perspective of sustainable development. We find that SDGs and most of the sub-goals have a clear upward trend, and the green finance fluctuates with upward development in each province, declining significantly in 2010 and 2019. The coupling coordination degree of green finance with SDG and its sub-goals shows a largely M-shaped upward trend in most regions, with most of them showing a synchronized decline in 2010–2011 and 2019. The eastern, central and western regions perform differently on different sub-goals.