Climate Finance and Green Transition

Given the strategic importance of enhancing China's commitment to address climate change through the development of renewable energy and the modernization of the energy structure, this chapter explores the impact of financial development on China's renewable energy growth, drawing from recent research by Ji and Zhang (2019). This study employs a time-series data and a novel systemic approach to examine the influences of stock market development, credit market growth, and the expansion of international investment on the growth of renewable energy in China over the past two decades. It shows the substantial contribution of the financial sector in reshaping China's energy landscape. Through a comparative analysis with the EU and US markets, it is revealed that China shares similarities with the EU market, particularly in the critical role played by financial development in promoting renewables, implying greater relevance of the EU's approach for China's trajectory in this context.