An assessment of financial mechanisms for green financial recovery and climate change mitigation: the case of China.

The COVID-19 pandemic has made reaching sustainability and net-zero goals more challenging. The primary emphasis on health-related concerns constrains the pro-environmental movements' ability to advance. Particularly in developing nations, financial institutions may be critical in promoting green recovery. This research uses data from 30 Chinese provinces from 2005 to 2021 to investigate whether adaptation preparation's financial mechanism affects the impact of climate change and green economic development (a measure of productivity growth). We applied numerous robustness tests for the validation of empirical findings of the study. The results shown that increased financial mechanisms have a considerable negative impact on economic development and productivity growth. However, the severity of these impacts depends heavily on the degree of adaptive preparedness. We find that increased financial inclusion may lead to a revival in economic development for provinces with improved adaptability capabilities (banking sector). On the other hand, climate change may have long-term negative effects on economic development and productivity growth in places with a limited capacity for adaptation. Therefore, in China financial mechanisms might affect green economic development and climate change mitigation are the quality of institutions and income level. The development plan must included by the practioners for furthure policy planning about climate adaptation. [ABSTRACT FROM AUTHOR]