The Role of Green Finance in China’s Industrial Low‐Carbon Energy Transition: Evidence From a Supply–Demand Framework

In the context of “dual‐carbon” goals, facilitating the industrial low‐carbon energy transition (IET) through developing green finance (GF) is urgent because China’s industrial sector accounts for the vast majority of carbon emissions. However, existing research often relies on a single indicator for GF and lacks a systematic examination of how it affects IET. Based on a panel dataset covering China’s 30 provincial regions for the period from 2004 to 2021, this study constructs a multidimensional GF indicator. Evidence suggests that GF significantly promotes IET. This finding remains robust after a series of tests. Mechanism analysis reveals that GF operates through dual channels: on the supply side, it expands clean energy supply (CES) by advancing energy technology. On the demand side, it stimulates clean energy demand (CED) by upgrading the industrial and energy structures. A further heterogeneity analysis reveals the promotion effect is more substantial after China established its GF system, and is particularly stronger in central‐western and resource‐dependent provinces. This paper provides robust evidence demonstrating how GF facilitates IET while offering valuable insights for crafting targeted policies.