Energy Policy 207 (2025) 114841

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Energy Policy
journal homepage: www.elsevier.com/locate/enpol

Towards the environmental sustainability path: the role of fintech,

renewable energy consumption, and climate policy uncertainty
Shuanglei Xu a , Xiaomeng Zhao b,* , Farhad Taghizadeh-Hesary c,d
a
School of International Trade and Economics, University of International Business and Economics, Beijing, 100029, China
b
International Business Strategy Institute, University of International Business and Economics, Beijing, 100029, China
c
School of Global Studies & TOKAI Research Institute for Environment and Sustainability (TRIES), Tokai University, Japan
d
Adnan Kassar School of Business, Lebanese American University, Beirut, Lebanon

A R T I C L E I N F O A B S T R A C T

JEL classification: Against the intensifying global climate crisis, the triad of fintech, renewable energy consumption, and climate
Q56 policy uncertainty is becoming a key factor in environmental sustainability. This study selects quarterly data
Q2 from China from 2005 to 2022. It applies the Nonlinear Autoregressive Distributed Lag (NARDL) model to
Q48
explore the asymmetric impacts of these three on control carbon intensity (CAI). It is found that (1) Fintech
G11
positively impacts the reduction of CAI in both the short and long term; (2) Renewable energy consumption
Keywords:
initially increases CAI in the short term, but contributes to decreased CAI in the long term; (3) The climate policy
Fintech
Renewable energy consumption
uncertainty similarly exhibits an asymmetric effect on CAI, exacerbating it in the short term and showing un­
Climate policy uncertainty certainty in the long run. These results highlight the importance of designing stable and predictable climate
NARDL policies to shape market expectations and encourage low-carbon investments. Policymakers should also leverage
fintech to enhance financing mechanisms for renewable energy projects, accelerating the green transition.

1. Introduction et al., 2024), and implementing carbon border adjustment tariffs. From
2005 to 2022, the proportion of global fossil energy use has steadily
In the context of globalization, rapid population growth and indus­ declined from 79.00 % to 76.71 %, signaling a gradual shift in the energy
trialization have led to the excessive consumption of traditional energy use structure towards a cleaner and more sustainable direction. By 2050,
sources. This, in turn, contributes to the rising frequency of extreme renewable energy supply is expected to account for two-thirds of global
weather events and intensifies global environmental degradation (Adom primary energy supply (Hassan et al., 2024). As the preeminent carbon
and Amoani, 2021). Carbon dioxide emissions are the primary cause of emitter globally, China has committed to achieving carbon peaking by
this problem (AlNemer et al., 2023). The global carbon dioxide emis­ 2030 and carbon neutrality by 2060. To this end, China is accelerating
sions in 2023 reached 37.4 billion tons. This massive amount of carbon its socio-economic low-carbon transition by implementing a pilot
emissions exacerbates global warming, elevates sea levels, and severely low-carbon city policy (Zhu and Li, 2024) and a pilot carbon emissions
threatens society’s long-term stability (Lau et al., 2023). In the face of trading policy, demonstrating a positive stance and firm determination
escalating carbon emissions, increasing climate change, and the urgency in global climate governance. The demand for renewable energy con­
of the energy crisis, the need for a sustainable energy transition has tinues to increase to reduce dependence on traditional energy sources
intensified globally (Alabdullah et al., 2023). and accelerate the carbon intensity (CAI) reduction process. At the same
The Paris Agreement explicitly sets out the goal of limiting the in­ time, the issue of environmental sustainability has become a focus of
crease in global average temperatures, and the United Nations Climate attention for policymakers in various countries due to the booming
Change Conference in 2021 further calls on global policymakers to align development of financial technology and the intensification of climate
climate policy towards a net-zero emissions vision and to link climate policy uncertainty.
policy closely with energy issues (Battiston et al., 2021). Countries are Recently, economic and financial crises have repeatedly hit the
actively taking action to reduce carbon emissions, including improving global economy, and the hedging effect of traditional assets has gradu­
carbon market mechanisms, developing carbon pricing strategies (Chen ally weakened (Hasan et al., 2021). Capital scarcity has emerged as a

* Corresponding author.
E-mail addresses: [email protected] (S. Xu), [email protected] (X. Zhao), [email protected] (F. Taghizadeh-Hesary).

https://doi.org/10.1016/j.enpol.2025.114841
Received 21 May 2025; Received in revised form 13 August 2025; Accepted 20 August 2025
Available online 25 August 2025
0301-4215/© 2025 Elsevier Ltd. All rights are reserved, including those for text and data mining, AI training, and similar technologies.
S. Xu et al. Energy Policy 207 (2025) 114841

significant barrier to the expansion of renewable energy systems, and environmental outcomes, ignoring their potential interaction effects and
green finance has positively influenced the promotion of the carbon nonlinearities. Moreover, most of these studies adopt econometric
emission reduction process in various countries by investing in envi­ regression methods and lack the analysis of dynamic impacts. To explore
ronmental protection projects such as renewable energy (Madaleno the nonlinear effects of FinTech, renewable energy consumption, and
et al., 2022). Among them, Fintech plays a crucial role as a fundamental climate policy uncertainty on CAI more deeply, this study adopts the
aspect of the Fourth Industrial Revolution (Chen et al., 2024). On one Nonlinear Autoregressive Distributed Lag (NARDL) method. The study’s
side, Fintech can provide more innovative products and services, pro­ results indicate that FinTech effectively reduces CAI levels in the short
mote enterprises’ green technological innovation, improve the effi­ and long term. In the short term, renewable energy consumption in­
ciency of resource allocation, and significantly decrease CAI creases CAI, but it contributes to a reduction in CAI in the long term.
(Muhammad et al., 2022). On the other side, fintech, with advanced Climate policy uncertainty also exhibits an asymmetric effect on CAI,
technologies including big data, cloud computing, blockchain, and exacerbating CAI in the short term, while the long-term effects are
artificial intelligence, facilitates investment in renewable energy enter­ uncertain.
prises, reduces reliance on traditional energy sources, and promotes the This research adds to the current body of literature in multiple ways.
optimization of countries’ energy structures, thereby reducing CAI First, in terms of substantive focus, prior studies have largely overlooked
(Cheng et al., 2023). Specifically, Fintech influences renewable energy the joint impact of fintech and renewable energy consumption under
investments mainly through green credit (Li et al., 2024; Zhou et al., climate policy uncertainty when analyzing the determinants of envi­
2022). It can effectively solve the problem of information asymmetry, ronmental sustainability. Moreover, country-specific empirical
mitigate the financial limitations of green sectors, enhance the alloca­ analyses-particularly those focused on China-remain limited, which in­
tion efficiency of green financial resources, and thus reduce CAI (Guo creases the difficulty of making precise and practical recommendations.
et al., 2023). To address this gap, this study incorporates a CPU index to evaluate
From a long-term perspective, using renewable energy contributes these interactions within the Chinese context. Second, concerning
positively to transforming the energy mix and significantly reduces CAI methodological innovation, although nonlinear models have been
(Ullah et al., 2024). For instance, a 1 % increase in per capita renewable widely employed in finance, their application in environmental and
energy use in China is associated with a 0.259 % decline in carbon energy economics remains relatively underdeveloped. This study inno­
emissions (Rahman et al., 2024). However, some scholars are skeptical vatively adopts the NARDL model to examine asymmetries in the short-
about the low-carbon effect of renewable energy. Dong et al. (2021) and long-term relationships between fintech, renewable energy use,
point out that the advancement of renewable energy may impede the CPU, and CAI. Unlike conventional linear models, NARDL is better
enhancement of carbon emission efficiency in the preliminary phase, suited to capturing asymmetric adjustment processes and behavioral
and promote its improvement in the later stage, and a reasonable in­ responses to positive and negative shocks. It thus accurately captures the
terval exists. Shahbaz et al. (2020) find that renewable energy con­ dynamics of the CAI process, providing insights for advancing carbon
sumption may have severe detrimental effects in nations where use is emission reduction and energy transition.
still relatively young. Recent studies further highlight threshold effects, The contributions of this study are as follows. First, this study fills a
whereby renewable energy adoption may only yield positive external­ research gap in the relevant field by incorporating fintech, renewable
ities once it exceeds a critical level. energy use, CPU, and CAI into a unified analytical framework. Second,
Climate policy uncertainty stems from several sources, including by introducing the NARDL model into environmental and energy eco­
shifts in the political landscape, policy adjustments, changes in laws, nomics (Tissaoui and Zaghdoudi, 2025; Zaghdoudi et al., 2024), the
iterations in technology, national dynamics in international agreements, study analyzes long-term and short-term equilibrium paths to explore
and the complexity of climate science itself (Siddique et al., 2023). In the the nonlinear effects of fintech, renewable energy use, and CPU on CAI,
short term, due to the long-term and irreversible nature of firms’ in­ providing new insights and policy implications for understanding the
vestments in low-carbon technologies (Fuss et al., 2009), climate policy mechanisms influencing CAI. Third, as the world’s largest carbon
uncertainty can make it difficult to set clear long-term investment goals emitter, China’s theoretical mechanism analysis based on its actual
(Gyamerah et al., 2024). To avoid sunk costs, firms often choose to delay conditions can provide valuable country-specific evidence for other
or abandon investment in low-carbon technologies, thereby slowing nations to draw upon.
down the process of a low-carbon economy (Golub et al., 2020). In This paper is structured as follows: Part II is a literature review,
addition, as awareness of social responsibility grows and investors pay which summarizes the research results in related fields; Part III describes
more attention to green investments, policy uncertainty exacerbates the the research methodology and data sources adopted in this study and
difficulty of financing high-carbon-emitting firms, which may lead to an constructs the NARDL model; Part IV conducts an empirical analysis,
increase in carbon emissions (Su et al., 2024). In the long run, frequent which explores the asymmetric impacts of fintech, renewable energy
and uncoordinated climate policies may lead to the portfolio fallacy, consumption, and climate policy uncertainty on environmental sus­
where the actual effects of policy overlays are not as expected or even tainability, and examines the validity of the model; the fifth part sum­
counterproductive (Ma et al., 2024). In addition, climate policy uncer­ marizes the research conclusions and puts forward policy
tainty affects the R&D inputs and outputs of high-carbon-emitting firms. recommendations. Fig. 1 illustrates the research framework of this
In the face of policy uncertainty, firms tend to adopt a wait-and-see paper.
strategy until the policy environment becomes clearer before making
decisions, which may lead to poor policy implementation (Hoang, 2. Literature review
2022). In particular, climate policy uncertainty manifests itself in
switching between fossil and renewable energy sources (Siddique et al., 2.1. The relationship between CAI and fintech
2023). Fossil fuels, as a significant source of carbon emissions, are sus­
ceptible to the adverse effects of policy changes. In contrast, climate From the perspective of environmental finance, fintech influences
policy uncertainty may drive capital flows to the renewable energy CAI by reducing information asymmetry, optimizing risk management,
sector, and these alternative energy sources are expected to be a vital and improving financing efficiency. On the one hand, fintech can
driver of the decarbonization process (Ding et al., 2022). Thus, the empower energy efficiency improvements and technological innovation.
long-term effects of climate policy uncertainty on environmental sus­ Applying finance in the energy sector, such as energy management
tainability remain ambiguous. systems and smart grids, can minimize information asymmetry while
Despite these insights, the existing literature remains fragmented. enhancing energy utilization efficiency (Kong and Xu, 2023). Estab­
Most studies isolate the impacts of fintech, renewable energy, or CPU on lishing innovative energy management systems can help businesses

2
S. Xu et al. Energy Policy 207 (2025) 114841

Fig. 1. The research framework of this paper.

monitor energy consumption in real time, promptly identify and address 2022). The energy mix has shifted from traditional high-carbon fossil
energy waste issues (Ugochukwu et al., 2024), and optimize risk man­ energy sources to low-carbon and carbon-free clean energy sources. This
agement. This reduces unnecessary energy waste and CAI and acceler­ shift has contributed to further reductions in CAI, slowing global
ates the pace of energy transition (Li et al., 2023; Luo et al., 2022). warming (Pani et al., 2022; Shahri et al., 2021).
Fintech can also drive technological innovation (Bhuiyan et al., 2024), However, in the early phases of developing renewable energy, due to
particularly in the areas of clean energy technologies and carbon cap­ infrastructure construction, renewable energy increases CAI (Medina
ture, storage, and utilization (CCUS) technologies, which not only and Gonzalez, 2022). Renewable energy projects usually require sup­
reduce energy consumption (Teng and Shen, 2023) but also promote porting infrastructure, such as substations, transmission lines, and roads
improvements in energy efficiency (Kasasbeh et al., 2024). (Ellabban et al., 2014), which consume much energy in constructing and
On the other hand, fintech can optimize the allocation of green applying these infrastructures, thus generating CAI. At the initial stage
financial resources. By enhancing financial market liquidity (Farooqi of the renewable energy project operation, due to a variety of reasons,
et al., 2024), reducing transaction costs and information barriers in such as technology, equipment and operating During the initial opera­
green finance, funds can flow more efficiently to sectors such as tion of renewable energy projects, due to various reasons such as tech­
renewable energy, low-carbon, and environmental protection (Uddin nology, equipment, and operation strategy, the energy conversion
et al., 2024). As an innovative driver of ecological finance, fintech can efficiency may not reach the optimal level, which may lead to the con­
also enhance the financial system’s ability to manage climate policy sumption of more raw materials with the same power output, thus
risks and optimize capital flows toward green sectors. Accordingly, our indirectly increasing CAI. More importantly, the transformation of en­
hypothesis is as follows: ergy structure is a relatively slow process (Fouquet, 2010; Neacsa et al.,
2022; Sovacool, 2016). There is an inevitable transition period in the
Hypothesis I. Fintech development reduces CAI.
gradual replacement of traditional energy sources by renewable energy
sources. During this transition period, overall CAI may temporarily in­
2.2. The relationship between CAI and renewable energy consumption crease because renewable energy projects have not entirely replaced
conventional energy projects, which are still operating and generating
In general, renewable energy consumption reduces CAI. Renewable carbon emissions. Accordingly, we put out the following hypothesis:
energy is an essential alternative for improving human health and
reducing pollution (Triki et al., 2023). On the one hand, as renewable Hypothesis IIa. Short-term increases in CAI are caused by using
energy technologies continue to develop and mature, the significance of renewable energy.
renewable energy in the energy transition is becoming more prominent Hypothesis IIb. Over time, CAI is suppressed by using renewable
(Gielen et al., 2019). For example, the further improvement of solar energy.
panel technology (Andrei et al., 2022; Parthiban and Ponnambalam,
2022) makes it possible to generate more electricity with the same en­
ergy input through solar energy, which further reduces the dependence 2.3. The relationship between CAI and climate policy uncertainty
on fossil energy and thus reduces CAI. However, as the production of
renewable energy continues to grow in scale, the cost of its production Climate policies influence energy systems (Bouri et al., 2022; Liang
has been gradually reduced, which has made renewable energy more et al., 2022; Shang et al., 2022), and climate policy uncertainty is a key
price-competitive and has further promoted its popularization and institutional environmental factor affecting energy system trans­
application (Ang et al., 2022; Luderer et al., 2022; Razi and Dincer, formation and CAI. In the short term, climate policy uncertainty inhibits

3
S. Xu et al. Energy Policy 207 (2025) 114841

low-carbon investment and technology diffusion. According to option term factors, this study uses the NARDL method, which helps examine
theory, uncertainty in climate policies leads investors to adopt a the dynamic relationship between the variables (Shin et al., 2014). The
wait-and-see attitude, which prevents energy stakeholders from making model is set up as follows.
the next investment decision. In the short term, under conditions of
yt = αʹ+ xt + + αʹ− xt − + εt (1)
climate policy uncertainty, most investors tend to postpone irreversible
investment decisions, waiting for policy clarity to avoid potential sunk
where, yt is the explanatory variable, xt + representing the positive and
costs, thereby delaying the process of energy structure decarbonization.
negative changes in the variables during the change process. Further­
In the context of unclear climate policies, businesses are uncertain about
more, represents the asymmetric long-term effects. Is the random error
future carbon prices and carbon reduction requirements, leading them
term, respectively. For xt + and xt − , the calculation equation is as
to delay investments in related emission reduction technologies (Sun
follows:
et al., 2024). This slows the dissemination and application of emission
reduction technologies, reduces their green innovation capabilities, and t
∑ t
∑
impacts their total factor productivity (Ren et al., 2022). The conser­ xt + = Δxk + = max(△xk , 0), xt − = Δxk − = min(△xk , 0) (2)
k=1 k=1
vative nature of corporate decision-making directly undermines efforts
to reduce CAI. Similarly, for technology researchers and developers, Based on the previous analysis, we consider the impact of fintech,
climate policy uncertainty makes it difficult for researchers and busi­ renewable energy consumption, and climate policy uncertainty on CAI.
nesses to determine which low-carbon technologies will receive In addition to that, this study also considers the role of other variables in
long-term policy support, increasing uncertainty about the path forward CAI. Therefore, we construct the model as follows.
and delaying the development of key technologies, thereby hindering
ΔCAIt = α0 + lCAIt− 1 + δ+ FITt−+ 1 + δ− FITt−− 1 + β+ REC+
ʹ ʹ ʹ
progress in reducing CAI. t− 1
− ʹ
REC−t− 1
+ λ CCPU+ +ʹ
+ λ− CCPU−t− 1 + + TAXt−+ 1
ʹ ʹ
In the long term, climate policy uncertainty reflects the instability of +β t− 1∑ μ (3)
q− 1
the policy environment, ultimately leading to energy uncertainty + TAXt− 1 +
− ʹ
μ −
j=1 j
η
ΔCAIt− j
∑q− 1 ( ʹ )
(Kayani et al., 2024). Under long-term climate policy uncertainty, policy + j=1 j ΔFITt− j + j − ΔFITt−− j
+
ψ + ʹ
ψ
enforcement agencies and businesses struggle to establish stable ∑q− 1 ( ʹ )
− ʹ
long-term action expectations. Concerns about policy and unclear + j=1 φj + ΔREC+ −
t− j + φj ΔRECt− j
∑q− 1 ( )
development goals result in low enforcement efficiency, increasing the ʹ
+ j=1 j + ΔCCPU+
τ − ʹ
τ −
t− j + j ΔCCPUt− j
energy system’s costs, complexity, and long-term costs. This ultimately ∑q− 1 ( ʹ
− ʹ
)
makes the uncertainty trend in CAI more unstable and increases the + j=1 j + ΔEPU+
ι ι
t− j + j ΔEPUt− j + t
−
σ
difficulty of achieving long-term deep emission reduction targets. In
In this model, CAI denotes carbon intensity, FIT stands for fintech,
other words, long-term uncertainty in climate policy hinders the effec­
REC represents renewable energy consumption, CCPU stands for climate
tive implementation of policies and investments to reduce CAI, leading
policy uncertainty, EPU expressed as economic policy uncertainty, t
to increased uncertainty in CAI and making it more challenging to
stands for time, and σ t denotes the error term. It is worth noting that
achieve emission reduction targets. Accordingly, we propose the
when the study involves multiple time series, there is heterogeneity of
following hypothesis:
variables (Dong et al., 2021). To reduce this possible problem, we log­
Hypothesis IIIa. In the short term, climate policy uncertainty sup­ arithmized the variables, and the modified model is as follows:
presses low-carbon investment and technology diffusion, driving up CAI.
Δln CAIt = α0 + l ln CAIt− 1 + δ+ ln FITt−+ 1 + δ− ln FITt−−
ʹ ʹ
1
Hypothesis IIIb. In the long term, climate policy uncertainty hinders +β +ʹ
ln REC+ + β ln − ʹ
REC−t− 1 + λ ln
+ʹ
CCPU+ + λ− ln CCPU−t−
ʹ
(4)
t− 1 t− 1 1
the effective implementation of policies and investments to reduce CAI. ∑q=1
+μ ln EPUt−+ 1 + μ ln EPUt−− 1 + Δ j=1 ηj Δln CAIt−
+ʹ − ʹ
j
∑q− 1 ( ʹ )
+ j=1 ψ j + Δln FITt−+ j + ψ j − Δln FITt−− j
ʹ
2.4. Research gaps
∑q− 1 ( ʹ )
+ j=1 φj + Δln REC+ t− j + φj Δln RECt− j
− ʹ −

There are still some gaps in research on fintech, renewable energy ∑q− 1 ( )
+ j=1 τj + Δln CCPUt−+ j + τj − Δln CCPU−t− j
ʹ ʹ
consumption, climate policy uncertainty, and CAI. Although some
∑q− 1 ( ʹ )
studies are examining fintech and environmental sustainability (see + j=1 ιj + Δln EPU+ t− j + ιj Δln EPUt− j + σ t
− ʹ −

Section 2.1), exploring the interactions between renewable energy

consumption and CAI (see Section 2.2), and analyzing how climate The error correction term (ECT) is vital in calculating the short-term
policy uncertainty affects CAI (see Section 2.3), there are still significant relationship, and the ECT can help the model adjust to equilibrium
gaps in the academic community. First, there is a lack of research on the during the estimation process. We incorporate ECT into the model as
relationship between fintech, climate policy uncertainty, and CAI, follows.
despite these three factors being independent. Second, existing research
Δln CAIt = α0 + l ln CAIt− 1 + δ+ ln FITt−+ 1 + δ− ln FITt−−
ʹ ʹ
generally overlooks the potential asymmetry in the impact of these three 1
+ʹ
ln REC+ ln REC−t− 1 + λ ln CCPU+
− ʹ +ʹ
ln CCPU−t−
ʹ
factors on CAI and their long-term and short-term effects. Empirical (5)
−
+β t− 1 + β ∑q=1 t− 1 + λ 1
research in this context is scarce, especially in rapidly transforming +μ+ ln EPUt−+ 1 + μ− ln EPUt−− 1 + Δ j=1 ηj Δln CAIt− j
ʹ ʹ

economies like China, where fintech is developing rapidly and climate ∑q− 1 ( ʹ )
+ j=1 ψ j + Δln FITt−+ j + ψ j − Δln FITt−− j
ʹ
policies are undergoing dynamic adjustments. By constructing a theo­ ∑q− 1 ( ʹ )
retical framework that integrates institutional economics and environ­ + j=1 φj + Δln REC+ t− j + φj Δln RECt− j
− ʹ −

mental finance, research on the asymmetry of fintech, climate policy ∑q− 1 ( ʹ )

+ j=1 τj + Δln CCPUt−+ j + τj − Δln CCPU−t− j
ʹ

uncertainty, and CAI can provide critical policy recommendations for ∑q− 1 ( )
+ j=1 ιj + Δln EPU+ t− j + ιj Δln EPUt− j + ΩECTt− 1 + σ t
ʹ − ʹ
similar economies.
−

Based on the above analysis, we apply the NARDL model. Before

3. Methodology
proceeding to the next step of the analysis, we need to assess the
reasonableness of the model by performing diagnostic tests between the
3.1. Model construction
variables, analyzing and testing for potential multicollinearity and
heteroscedasticity.
To analyze the asymmetric relationship between the short- and long-

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S. Xu et al. Energy Policy 207 (2025) 114841

3.2. Variable measures and data sources tests have similarities in their operation, i.e., the existence of the unit
root in the level case, and we need to repeat the step after determining
The NARDL method is used in this study to assess the asymmetric the difference. The unit root problem exists when both methods are in
relationship between CAI, fintech, renewable energy consumption, and the same situation, but the unit root becomes smooth after performing
climate policy uncertainty. Carbon dioxide emissions express carbon the difference. Table 2 shows the output of the test results. Fig. 2 shows
intensity relative to GDP. Renewable energy consumption is measured the mechanism flow chart.
by renewable energy consumption expressed as a percentage of total
energy consumption. Drawing on the methodology of Li et al. (2024), we 4.2. Bounds test analysis
categorize fintech into three indicators: cell phone subscribers, inter­
national credit in the banking sector, and the number of Internet users. After determining that the data are consistent with smoothing, the
The data was processed using principal component analysis (PCA) to next step is to assess whether the model is smooth, i.e., determine
obtain financial technology indicators. For climate policy uncertainty, whether the model is stable when calculating the long-run relationship.
this paper adopts the research of Tian and Li (2023). The method for In the evaluation process, the F statistic is based on the Wald test for
determining climate policy indicators was proposed by Baker et al. boundaries, and Table 3 demonstrates our estimation results. As evi­
(2016). denced in Table 3, the observed value of F is 3.867, which exceeds the
In addition, our study includes economic policy uncertainty as the upper threshold at the 1 % significance level (at which point the value is
control variable. All our data comes from the World Bank, the Federal 3.77) and also exceeds the upper threshold at the 10 % significance level
Reserve Bank, Our World in Data, and China’s Climate Policy Uncer­ (at which point the value is 1.85). This result assures the stability of our
tainty website. Our sample period runs from the first quarter of 2005 to model, and the result also reflects the potential long-run asymmetric
the first quarter of 2022 for the stability of the analysis. We convert all relationship between the variables.
data to quarterly observations.
4.3. NARDL estimation results
3.3. Data analysis
Table 4 presents the outcomes of the short-term estimation of the
Before proceeding with the estimation, we first need to characterize NARDL model. As can be seen from the table, the model’s stability is
the variables. We conducted a descriptive statistical analysis of the validated by the negative and significant value of the ECT. The rate at
factors based on these considerations. Table 1 presents the descriptive which the model adjusts from short-run imbalance to the new long-run
statistics for all variables in the article. Based on the results in Table 1, equilibrium (Abbasi et al., 2022). The ECT coefficient of − 0.138 in­
all sequences have a negative skewness except for economic policy un­ dicates that deviations from this equilibrium are corrected at approxi­
certainty. Fintech exhibits the most significant standard deviation, mately 13.8 % per cycle. If any shock causes CAI to deviate from the
indicating that fintech has the highest probability of volatility over the long-run equilibrium, the 13.8 % deviation will be corrected in the next
sample period. Fintech is a rapidly developing field with high techno­ cycle. Since we can reject the assumption of serial correlation, this
logical innovation and a high rate of innovation. suggests that the results are acceptable. The estimates of the NARDL
Furthermore, fintech displays the highest kurtosis, indicating a more framework in this study are generally accurate.
concentrated probability of changes in fintech itself or expectations. The In analyzing the short-run shock of fintech on CAI, the asymmetric
development of fintech mainly relies on the innovation of underlying analysis is negative, with an intensity of − 0.011. It indicates that fintech
technologies, such as blockchain, big data, etc., and most of the break­ will reduce CAI in the short run. It verifies HI. Fintech minimizes the cost
throughs and applications of these technologies are concentrated in a and risk of financial transactions in the short run through intelligent
specific period, leading to more concentrated changes in fintech financial products and services (Taherdoost, 2023). Such reduced
compared to other variables. Moreover, economic policy uncertainty transaction costs and risks can help stimulate the innovative energies of
obeys a normal distribution, and the Jarque-Bera test for other variables enterprises and push them to adopt more environmentally friendly
rejects the original hypothesis. production methods and means.
Furthermore, this is not limited to this. Fintech can also reduce CAI
4. Empirical results by reshaping green financial infrastructure. The Fintech Development Plan
issued in 2022 clearly states that, in addition to the deep integration of
4.1. Unit root test fintech and green finance last year, the use of technological means to
promote the service and development of green financial products, as
Before proceeding to the following analysis step, we need to test the well as the coverage and accuracy of financial services for green in­
unit root between the variables to assess the smoothness between the dustries, will enable policy dividends to be more efficiently converted
series. There are two primary methods for smoothness estimation: the into actual actions, thereby assisting in the realization of green trans­
Augmented Dickey-Fuller (ADF) test and the Phillips-Perron (PP) test formation and low-carbon sustainable development. In addition,
(Dickey and Fuller, 1979; Phillips and Perron, 1988). The above two through the means of financial technology, the public can more conve­
niently learn about environmental protection and participate in envi­
Table 1 ronmental protection activities, and at the same time, can more
Descriptive statistics of the variables. conveniently pay environmental protection fees (Uralovich et al., 2023),
CAIt FITt RECt CCPUt EPUt
Table 2
Mean − 0.563 − 0.7 2.219 4.535 4.87
Results of the ADF, and PP unit root test.
Median − 0.503 − 0.412 2.202 4.572 4.783
Maximum − 0.362 0.35 2.753 5.276 6.213 ADF PP ADF PP
Minimum − 0.861 − 5.338 1.695 3.615 3.71
Level Δ
Std. Dev. 0.184 1.276 0.335 0.376 0.637
Skewness − 0.302 − 2.24 − 0.098 − 0.658 0.248 CAIt 1.353 − 2.058 − 8.062*** − 8.062***
Kurtosis 1.384 8.373 1.662 3.174 2.369 FITt − 1.864 − 1.494 − 5.434*** − 5.46***
Jarque-Bera 8.557** 140.715*** 5.256* 5.072* 1.848 RECt − 2.89 3.29 − 7.875*** − 5.555***
Observations 69 69 69 69 69 CCPUt 0.249 0.44 − 9.781*** − 10.219***
EPUt − 2.424 − 1.697 − 12.039*** − 13.215***
Notes: Std. Dev. refers to standard deviation.

5
S. Xu et al. Energy Policy 207 (2025) 114841

Fig. 2. Theoretical mechanism chart.

In analyzing the short-run shock of climate policy uncertainty on

Table 3
CAI, the asymmetric analysis is positive with an intensity of 0.015. It
Bounds test results in the nonlinear specification.
verifies HIIIa. In the short term, heightened uncertainty regarding
Model F-Statistic Upper Lower climate policy results in elevated CAI. When climate policy is unclear,
bound bound
firms and individuals may delay investment in clean technologies
LnCAI/(lnFIT, lnREC, lnCCPU, 3.867 ​ ​ (Noailly et al., 2022). It is because firms cannot be sure of the future
lnEPU)
policy environment, especially the possible cost of carbon tax and
Selected Optimal Lag (2,4,3,2,4) ​ ​
Critical Values ​ ​ ​ emission limits, which leads them to be more cautious when making
10 % ​ 1.85 2.85 investment decisions. The result is a delay in corresponding technology
5% ​ 2.11 3.15 upgrades, and firms’ overall technological emergence and upgrading are
1% ​ 2.62 3.77 inhibited.
Table 5 presents the outcomes of the long-term estimation of the
NARDL model. In analyzing the long-run impact of fintech on CAI, the
Table 4 asymmetric analysis is negative, with an intensity of − 0.016. It verifies
NARDL short term results. HI. Fintech development has driven the financial industry’s digital
Variables Coeff T-Statistics P.Value transformation in the long run. Fintech can help improve the efficiency
and transparency of financial services (Liang, 2023), and as a result,
ECT − 0.138*** − 3.372 0.002
LnFIT − 0.011** − 2.047 0.051 capital can flow more efficiently to the renewable energy sector, green
LnREC 0.139*** 2.85 0.008 technology companies, and environmental programs. Fintech has a
LnCCPU 0.015*** 3.66 0.001 robust resource allocation function that can guide the flow of capital
LnEPU − 0.001 − 0.078 0.939
(Luo et al., 2022), technology, and enterprise production factors to
Notes: ***, ** and * denote statistical significance of 1 %, 5 % and 10 %, low-carbon and environmentally friendly areas, thus providing more
respectively. accurate financing services for enterprises. It facilitates the restructuring
and enhancement of highly polluting industries and energy-consuming
which heightens ecological awareness and helps to increase attention to enterprises, enhancing their carbon emission efficiency and reducing
environmental issues. CAI. They are coupled with fintech development to provide substantial
In examining the short-run impact of renewable energy use on CAI, financial support for technological innovation. Financial institutions can
the asymmetric analysis was positive, with an intensity of 0.139. It more easily identify enterprises with innovation potential through
verifies HIIa. China’s large-scale wind and solar power bases are
concentrated in the west, while consumption centers are clustered in the Table 5
southeast coastal regions. Wind and solar power curtailment coexisting NARDL long term results.
with thermal power peak shaving occurs occasionally. To balance
Variables Coeff T-Statistics P.Value
intermittency, coal-fired power peak shaving is required, which offsets
the benefits of green power and increases CAI. With renewable energy’s Cons − 0.053*** − 4.24 0.000
LnFIT 0.016** 2.967 0.006
intermittent and unstable nature, adequate energy storage and peaking
− −
LnREC − 0.047* − 1.963 0.06
technologies are needed to balance supply and demand (Kebede et al., LnCCPU − 0.001 − 0.136 0.893
2022; Rashid, 2024). During the initial phases of renewable energy LnEPU 0.016** 2.976 0.006
advancement, there are problems of imperfect technology and high Notes: ***, ** and * denote statistical significance of 1 %, 5 % and 10 %,
costs, which can exacerbate CAI. respectively.

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S. Xu et al. Energy Policy 207 (2025) 114841

fintech tools, especially those committed to developing clean energy, Table 6

energy-saving technologies, and environmentally friendly materials. Diagnostic tests.
Financial support can safeguard and accelerate the innovation and Test name P-Value of Chi-Square
application of green technologies, contributing to a significant decrease
Breusch-Pagan-Godfrey 0.1023
in energy usage and CAI. ARCH 0.1293
In examining the long-run renewable energy usage on CAI, the Breusch-Pagan-Godfrey 0.5155
asymmetric analysis was negative, with an intensity of − 0.047. It ver­
ifies HIIb. Sources of renewable energy, such as tidal, solar, and wind,
produce little to no carbon dioxide emissions during their consumption, 5. Conclusions and policy suggestions
and their consumption can effectively lower carbon emissions (Imran
et al., 2024; Kahia et al., 2019). With the large-scale application of 5.1. Conclusions
renewable energy, the structure of energy consumption has seen a
gradual optimization. The share of fossil energy consumption has This investigation explores the impacts of financial technology, the
decreased. consumption of renewable energy, and the uncertainties surrounding
In contrast, the share of renewable energy consumption has climate policy on CAI in the Chinese context and analyzes the existing
increased, and this structural change has helped to reduce the overall asymmetries. The results show that fintech reduces CAI over both
intensity of carbon emissions (Kirikkaleli et al., 2022; Nan et al., 2022; extended and immediate periods. In the short term, renewable energy
Yu et al., 2020), thereby decreasing CAI. Over the long haul, with the consumption increases CAI; in the long term, renewable energy con­
further development of renewable energy sources, the relevant techno­ sumption reduces CAI. This pattern may be attributable to transitional
logical level has been improved so that these energy sources can be inefficiencies or mismatches between renewable energy deployment and
utilized more efficiently and steadily. This technological progress and grid infrastructure in the short term, while long-term benefits arise from
enhancement clarify the contribution of renewable energy to reducing cleaner energy substitution. The uncertainty surrounding climate policy
CAI. The asymmetric analysis of climate policy uncertainty’s long-run exerts an asymmetric influence on CAI. In the short term, climate policy
effects on CAI is negative, but the results are insignificant. It verifies uncertainty exacerbates CAI; in the long term, climate policy uncer­
HIIIb. The uncertainty surrounding climate support fosters a cautious, tainty has a complex impact on CAI. This may be because uncertain
wait-and-see approach to the emission behavior of firms and in­ climate policies increase market participants’ uncertainty about the
dividuals. Long-term climate policy uncertainty affects market expec­ future development of green-related technologies and industries. In
tations of future energy prices and energy mix. Climate policy addition, the study concludes that there is also an asymmetry in the
implementation involves multiple sectors and interest groups, and the impact of economic policy uncertainty on CAI.
implementation process may have various complex factors (Lee, 2022;
Plank et al., 2021). In addition, the ambiguity surrounding the climate 5.2. Policy implications
policy itself will also lead to difficulties in achieving the expected results
of the policy implementation, and these factors may combine to lead to In response to these findings, we make the following policy
poor policy implementation, thus affecting the rate of reduction of CAI. recommendations.
For the market, climate policy uncertainty leads to changes in
investor-consumer expectations about energy usage and carbon emis­ (1) Policymakers should clarify the application scenarios and areas of
sions behavior (Guesmi et al., 2023), leading to insignificant analytical fintech in the green industry. They should provide fiscal in­
results. centives such as tax breaks and targeted subsidies to encourage
In examining the enduring effects of economic policy uncertainty on financial institutions and green enterprises to adopt fintech tools,
CAI, the asymmetric analysis is positive, with an intensity of 0.016. contributing to CAI reduction. Developing integrated data-
Increased economic uncertainty tends to create pessimistic expectations sharing frameworks between industry and government can also
of the future among individuals and firms, leading to a decrease in in­ help dismantle informational silos, facilitating fintech-driven
vestment and consumption activities (Adams et al., 2020), which does solutions such as carbon tracking, green credit scoring, and
not contribute to reducing carbon emissions but may also trigger market climate risk assessment. Policymakers can prioritize the devel­
panic and speculative behaviors, leading to resource mismatches and opment of national blockchain accounts by focusing on key en­
inefficiency, which in turn increase CAI. Amidst a landscape charac­ terprises, such as those with annual energy consumption
terized by significant economic policy uncertainty, firms are more likely exceeding one million tons of standard coal, and adopting real-
to engage in risky behavior, including increasing emissions. Investors time grid data integration to generate financeable carbon assets
may be wary of clean energy and low-carbon technologies, leading to automatically. Alternatively, they can provide exceptional re-
the postponement or cancellation of clean energy projects, thus slowing lending support from the central bank to enterprises with
down the transition to a low-carbon energy mix. Furthermore, within a higher ratings, thereby mandatorily connecting key enterprises to
context characterized by ambiguity in economic policy, firms are likely national blockchain carbon accounts.
to face more significant business risks and cost pressures (Benlemlih and (2) Renewable energy is an effective means to reduce CAI. However,
Yavaş, 2024), reducing incentives for technological innovation. Tech­ when formulating relevant support policies, policymakers should
nological innovation is one of the most important means of reducing consider factors such as regional resource endowment, environ­
carbon emissions, resulting in increased CAI. mental capacity, economic foundation, and market demand, and
A series of tests was conducted to test the model for hetero­ scientifically plan the layout of renewable energy development.
skedasticity and multicollinearity. The Breusch-Godfrey Serial Correla­ Policymakers should avoid blind construction and development,
tion LM Test was employed to evaluate the existence of serial correlation ensure that renewable energy projects are coordinated with
and multicollinearity. The Breusch-Pagan-Godfrey and ARCH tests were power grids, roads, and other infrastructure, and reduce addi­
used to analyze the presence of heteroskedasticity. If the result of the tional carbon emissions caused by mismatches between supply
above analysis has a P-value less than 0.05, it proves that the hypothesis and demand. To enhance long-term effectiveness, policymakers
exists, i.e., it proves heteroskedasticity and multicollinearity. However, should improve grid integration and focus on innovation in
all the generated results have a P-value exceeding 0.05, indicating sta­ renewable technologies that boost conversion efficiency. To
tistical insignificance, thereby validating the accuracy of the modeling address the short-term emissions increase dilemma associated
configuration (see Table 6). with renewable energy, policymakers can implement real-time

7
S. Xu et al. Energy Policy 207 (2025) 114841

differentiated subsidies for renewable energy storage, such as Data availability

transferring subsidies from fossil fuels, and prioritize support for
energy storage facilities. With the gradual development of The data that support the findings of this study are available from the
renewable energy, policymakers can consider gradually abolish­ corresponding author upon reasonable request.
ing subsidies and preferential policies for renewable energy,
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