The contribution of green finance to energy security in the construction of new energy system: Empirical research from China

Previous studies have discussed theoretically the role of green finance in energy security, but empirical studies have yet to explore their relationship. In order to make up for this deficiency, we first measured the development level of green finance and the comprehensive score of energy security in China from 2000 to 2020. Then, we constructed a vector error correction model based on the cointegration relationship. The results show a stable cointegration relationship between the long-term variables, and the improvement of the development level of green finance is conducive to ensuring China's energy security. However, from the results of the short-term dynamic adjustment effect, the change in green finance development level has no significant impact on the change in energy security level because the role of green finance has a specific time lag. Further, through impulse response analysis, it is found that when the development level of green finance has a unit positive impact, energy security will produce a first negative and then positive response. The variance decomposition results show that the contribution of green finance to energy security first weakens and then gradually increases. To sum up, the long-term development of green finance will help stabilize China's energy security. Therefore, this study proposes strengthening supervision over green finance, developing "new energy + green finance", achieving positive interaction between green finance and transformational finance, and enabling green finance with digital technology.