This paper analyzes the effects of green credits and green securities on environmental quality in a multivariate EKC framework across Chinese provinces during the 1992Q1-2020Q4 period. In this comparative analysis, we employ the DOLS and FMOLS estimators along with the method of moments-quantile regression (MM-QR) with the fixed-effects model. First, the FMOLS and DOLS methods show that short-term green credits (STLs) and green securities (CAPs) reduce carbon emissions (CE) in Chinese provinces. Unlike the Western region, long-term green credits (LTLs) improve environmental quality in the Eastern and Central regions. Second, large STLs and CAPs affect CE more than their low levels, unlike large LTLs. Third, STLs and CAPs increase CE only in the most polluting provinces of the central and western regions, but LTLs improve environmental quality only at the 70th, 80th, and 90th quantiles of CE in all provinces. Fourth, although renewable energy consumption inhibits carbon emissions in all provinces, oil prices, urbanization, trade openness, and foreign direct investments have heterogeneous effects on carbon emissions across the quantiles. Finally, our findings validate the EKC hypothesis only in the Eastern and Central regions. Accordingly, we propose policy implications for sustainable development in China.
JEL classification: C40; G10; G20; Q20; Q54