A Multi-Level Systems Analysis of Green Finance Policies: Exploring the Dual Effects on Air Pollution and Carbon Emissions

The environmental effects of green finance policies involve complex systemic interactions across multiple levels, yet existing studies often adopt fragmented analytical approaches. Drawing on the multi-level perspective (MLP), this study conceptualizes the environmental impacts of Green Finance Reform and Innovation Pilot Zones (GFRIPZs) as a process of systemic green transformation involving interactions among landscape, regime, and niche levels. Using panel data of 287 prefecture-level and above cities in China from 2012 to 2022, this study applies a staggered difference-in-differences (DID) model to evaluate the environmental impacts of GFRIPZs. The results show that GFRIPZs significantly reduce both PM2.5 concentrations and CO2 emissions. Mechanism analyses based on multiple mediation models and GSEM reveal pollutant-specific differences in underlying channels. Green technological innovation (GTI) constitutes one observable pathway for PM2.5, whereas the policy effect is more closely associated with energy structure adjustment for CO2. Heterogeneity analysis further shows that PM2.5 mitigation is stronger in colder cities, while CO2 reduction is more pronounced in developed cities. These findings reveal pollutant-specific mechanisms of green finance and offer policy implications for developing countries seeking to promote systemic green transformation.