Would Financial Development Help China Achieve Carbon Peak Emissions?

Impacts of financial development on the energy consumption in China from the perspective of poverty alleviation efficiency

Poverty alleviation and energy saving are two major issues of sustainable development targets. Meanwhile, financial development (FD) is a powerful engine of economic growth, which is regard as a valid approach to contain the demand for energy consumption (EC). However, few studies link the three factors and explore the specific impact mechanism of poverty alleviation efficiency (PE) on the tie between FD and EC. Thus, we employ the mediation and threshold models to evaluate the influence of FD on the EC in China during 2010-2019 from the perspective of PE. We affirm that FD indirectly promotes EC through the channel of PE. The mediating effect of PE is responsible for 15.75% of the total effect of FD on the EC. Moreover, FD generates a significant threshold impact on the EC considering the change of PE. When the PE exceeds 0.524, the role of FD in promoting EC is strengthened. Ultimately, the outcome suggests policymakers need to prominent the trade-off between energy saving and poverty reduction during the fast evolution of financial system.