Measurement and spatial-temporal analysis of coupling coordination development between green finance and environmental governance in China

To direct financial resources for achieving the goal of sustainable development, Chinese government has devoted increasing efforts to developing green finance. However, few studies explored the relationship between green finance and environmental governance. Thus, this paper first theoretically discusses the interactive connection between green finance and environmental governance. And then we construct two comprehensive indicator systems and use entropy method to calculate green finance index (GFI) and environmental governance index (EGI) for 30 provinces of China from 2004 to 2020. The theoretical analysis unveils the complementary and mutual reinforcing relationship of the interaction between green finance and environmental governance through green industry. Using the data of GFI and EGI, the coupling coordination degree of green finance and environmental governance (CCDGE) is measured by coupling coordination model. The trend analysis discovers that GFI is increasing over time while EGI starts decreasing from 2013. Although GFI has grown more rapidly than EGI, but the development of green finance still lags behind environmental governance because of its short history. Just because of the uncoordinated development between green finance and environmental governance, CCDGE has been hovering in the moderate coupling coordination stage for a long time and still has a great distance to the high coupling coordination level. These findings imply that the relationship between green finance and environmental governance is still in a state of disorderly development that restricts each other. Furthermore, the findings of spatial-temporal analysis show there are obvious regional differences in GFI and EGI and the interactive effect between green finance and environmental governance. Specifically, GFI and EGI in eastern China are the highest, while CCDGE presents with a ladder decline status of "eastern region > central region > northeast region > west region." Our findings provide vital references for policymakers to promote the coupling coordination development between green finance and environmental governance.