Impact of green technology and green finance on carbon neutrality from the quantile and dynamic perspectives

Green technology and green finance serve as crucial measures for advancing carbon neutrality and achieving the Sustainable Development Goal 13 of the United Nations. However, there is ongoing debate about their actual impact on carbon neutrality. Based on 1658 daily observations from January 2019 to July 2023 in China, this paper employs a Quantile-on-Quantile regression method to thoroughly investigate the nonlinear effects of green technology and green finance on carbon neutrality. Additionally, the dynamic characteristics of this impact in the short, medium and long term are systematically examined through multiscale wavelet decomposition. Furthermore, Granger causality tests are conducted to explore the causal relationships from green technology and green finance to carbon neutrality across different quantiles. Analytical results reveal that, overall, both green technology and green finance significantly contribute to carbon neutrality, and their carbon reduction effect intensifies with the development of both. However, at low levels of green technology and green finance, the scale advantages for carbon reduction may not be fully realized and this could even be detrimental to carbon neutrality. From a dynamic perspective, the promotion effect of green technology on carbon neutrality is more prominent in the long run. In comparison, the role of green finance is more apparent in the short and medium term, with its long-term impact contingent upon the development levels of both green finance and carbon neutrality. Findings of this study hold significant policy implications for the scientific utilization of green technology and green finance to promote carbon neutrality.