<p>Based on Chinese urban panel data spanning 2000–2023, this study establishes a two-way fixed effects model and employs a suite of econometric approaches, namely data diagnostic tests, benchmark regression, robustness and endogeneity checks, mechanism analysis, interaction modeling, threshold regression and grouped regression. It systematically investigates the carbon mitigation effect, transmission channels, synergistic emission reduction mechanism and heterogeneous traits of green finance, with a core focus on the joint emission reduction role of green finance and green technology innovation. The findings reveal that green finance imposes a significant dampening impact on urban carbon emissions. Mechanistically, green finance curbs carbon emissions by driving digital industry agglomeration and advancing industrial structure upgrading. Furthermore, the synergistic emission reduction effect between green finance and green technology innovation is statistically significant, and the carbon mitigation efficacy of green finance is substantially strengthened once green technology innovation surpasses its threshold value. Heterogeneity analysis demonstrates that the emission reduction performance of green finance is more salient in the Yangtze River Delta Urban Agglomeration and resource-based cities, with green credit, green investment and green funds yielding superior mitigation outcomes, underscoring the pivotal function of policy guidance in the carbon reduction mechanism of green finance. This research enriches the theoretical framework of green finance for carbon abatement and offers empirical support for the differentiated promotion of regional low-carbon transition and the optimization of the green financial instrument system.</p>