Research on the Mechanism of Green Finance Driving the Realization of Carbon Neutrality
Research Article
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Research on the Mechanism of Green Finance Driving the Realization of Carbon Neutrality

Nuoyi Hu 1*
1 Suzhou High School of Jiangsu Province
*Corresponding author: 2956644259@qq.com
Published on 19 November 2025
Volume Cover
AEMPS Vol.241
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-541-7
ISBN (Online): 978-1-80590-542-4
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Abstract

Climate change's escalating threats have propelled carbon neutrality to the forefront of global priorities. With global temperatures having risen 1.1°C above pre-industrial baselines, achieving net-zero emissions demands immediate multilateral action. One of the most important instruments for facilitating the shift to a low-carbon economy is green finance. Nevertheless, the operational pathways through which financial instruments catalyze carbon neutrality require methodical investigation. By methodically investigating how green finance affects carbon neutrality from four key angles—policy tools, market mechanisms, technological innovation, and societal governance—this study aims to deepen the understanding in this field. The research adopts a mixed-methods approach that includes a comprehensive literature review and in-depth case studies. The findings indicate that green finance significantly enhances the feasibility and efficiency of achieving carbon neutrality through market-based incentives, diversified policy instruments, support for technological innovation, and multi-stakeholder governance. The study concludes that increasing investment in green technology, strengthening international cooperation, and optimizing policy design are essential to maximize the impact of green finance.

Keywords:

Green Finance, Carbon Neutrality, Policy Instruments, Market Mechanisms, Technological Innovation

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Hu,N. (2025). Research on the Mechanism of Green Finance Driving the Realization of Carbon Neutrality. Advances in Economics, Management and Political Sciences,241,15-21.

References

[1]. Tomlinson, L. (2015). Procedural justice in the United Nations framework convention on climate change. Cham, Switzerland: Springer.

[2]. van Vuuren, D., Brutschin, E., Dafnomilis, I., Dekker, M., Hooijschuur, E., Kikstra, J., ... & Tagomori, I. (2024). Sharing the effort: Annual Net-Zero Report 2024.

[3]. Raimi, D., Zhu, Y., Newell, R. G., & Prest, B. C. (2024). Global energy outlook 2024: Peaks or plateaus. Resources for the Future: Washington, DC, USA.

[4]. Zhang, W., Tang, T., Bakhsh, S., & Liu, X. (2025). Green finance & carbon neutrality: strategies and policies for a sustainable future. Frontiers Media SA.

[5]. Agrawal, R., Agrawal, S., Samadhiya, A., Kumar, A., Luthra, S., & Jain, V. (2024). Adoption of green finance and green innovation for achieving circularity: An exploratory review and future directions. Geoscience frontiers, 15(4), 101669.

[6]. Z/Yen Group Limited. (2024). Z/Yen Group Limited. Zyen.com. https: //www.zyen.com/publications/professional-articles/the-global-green-finance-index-14-supplement-catastrophes-insurance-closing-the-gap/

[7]. MacAskill, S., Roca, E., Liu, B., Stewart, R. A., & Sahin, O. (2021). Is there a green premium in the green bond market? Systematic literature review revealing premium determinants. Journal of cleaner production, 280, 124491.

[8]. Wang, Y., & Zhi, Q. (2016). The Role of Green Finance in Environmental Protection: Two Aspects of Market Mechanism and Policies. Energy Procedia, 104, 311-316.

[9]. Naran, B., Buchner, B., Price, M., Stout, S., Taylor, M., & Zabeida, D. (2024). Global landscape of climate finance 2024. Climate Policy Initiative.

[10]. NGFS Climate Scenarios for central banks and supervisors | Network for Greening the Financial System. (2025). Network for Greening the Financial System. https: //www.ngfs.net/en/publications-and-statistics/publications/ngfs-climate-scenarios-central-banks-and-supervisors

[11]. Hilbrich, S., & Berensmann, K. 2. The EU Sustainable Finance Strategy: proposals for reform and extension. The European Union’s Global Role in a Changing World, 10.

[12]. World Bank. (2022). State and Trends of Carbon Pricing 2022. Washington, DC: World Bank.

References

[1]. Tomlinson, L. (2015). Procedural justice in the United Nations framework convention on climate change. Cham, Switzerland: Springer.

[2]. van Vuuren, D., Brutschin, E., Dafnomilis, I., Dekker, M., Hooijschuur, E., Kikstra, J., ... & Tagomori, I. (2024). Sharing the effort: Annual Net-Zero Report 2024.

[3]. Raimi, D., Zhu, Y., Newell, R. G., & Prest, B. C. (2024). Global energy outlook 2024: Peaks or plateaus. Resources for the Future: Washington, DC, USA.

[4]. Zhang, W., Tang, T., Bakhsh, S., & Liu, X. (2025). Green finance & carbon neutrality: strategies and policies for a sustainable future. Frontiers Media SA.

[5]. Agrawal, R., Agrawal, S., Samadhiya, A., Kumar, A., Luthra, S., & Jain, V. (2024). Adoption of green finance and green innovation for achieving circularity: An exploratory review and future directions. Geoscience frontiers, 15(4), 101669.

[6]. Z/Yen Group Limited. (2024). Z/Yen Group Limited. Zyen.com. https: //www.zyen.com/publications/professional-articles/the-global-green-finance-index-14-supplement-catastrophes-insurance-closing-the-gap/

[7]. MacAskill, S., Roca, E., Liu, B., Stewart, R. A., & Sahin, O. (2021). Is there a green premium in the green bond market? Systematic literature review revealing premium determinants. Journal of cleaner production, 280, 124491.

[8]. Wang, Y., & Zhi, Q. (2016). The Role of Green Finance in Environmental Protection: Two Aspects of Market Mechanism and Policies. Energy Procedia, 104, 311-316.

[9]. Naran, B., Buchner, B., Price, M., Stout, S., Taylor, M., & Zabeida, D. (2024). Global landscape of climate finance 2024. Climate Policy Initiative.

[10]. NGFS Climate Scenarios for central banks and supervisors | Network for Greening the Financial System. (2025). Network for Greening the Financial System. https: //www.ngfs.net/en/publications-and-statistics/publications/ngfs-climate-scenarios-central-banks-and-supervisors

[11]. Hilbrich, S., & Berensmann, K. 2. The EU Sustainable Finance Strategy: proposals for reform and extension. The European Union’s Global Role in a Changing World, 10.

[12]. World Bank. (2022). State and Trends of Carbon Pricing 2022. Washington, DC: World Bank.

Cite this article

Hu,N. (2025). Research on the Mechanism of Green Finance Driving the Realization of Carbon Neutrality. Advances in Economics, Management and Political Sciences,241,15-21.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICFTBA 2025 Symposium: Global Trends in Green Financial Innovation and Technology

ISBN: 978-1-80590-541-7(Print) / 978-1-80590-542-4(Online)
Editor: Lukáš Vartiak, Sun Huaping
Conference website: https://www.icftba.org/Beijing.html
Conference date: 20 November 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.241
ISSN: 2754-1169(Print) / 2754-1177(Online)

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