Does digital financial inclusion support carbon neutrality? A cross-regional study

Abstract This study aims to investigate the relationship between digital financial inclusion and carbon neutrality in different provinces of China. The findings indicate that the relationship between digital financial inclusion and carbon neutrality varies across regions. Specifically, digital financial inclusion is found to have a causal effect on carbon neutrality in one-third of the provinces, with a stronger effect observed in the middle region. Conversely, carbon neutrality is found to have a causal effect on digital financial inclusion, particularly in the western regions. However, no causal relationship is detected between digital financial inclusion and carbon neutrality in two-thirds of the regions. Promoting green technology and supporting green innovation initiatives can reduce carbon emissions and support regional innovation clusters. Investing in digital infrastructure, incorporating environmental risk assessments, and aligning digital financial services with sustainable development goals can improve access.