Abstract: Digital inclusive finance has played an important role at the micro-levels such as residents’ income, consumption and entrepreneurship, profoundly changing residents’ production and living patterns. The findings of this paper based on the county data in China from 2014 to 2017 show that digital inclusive finance has a significant carbon emission reduction effect. The result of the heterogeneous analysis reveals that the carbon emission reduction effect of digital financial inclusion varies in intensity with the geographical location and socioeconomic characteristics. Specifically, this effect is more pronounced in the eastern region, the regions with higher material capital, the regions with larger population size, and the regions with higher education levels. The result of the mechanism analysis shows that the digital inclusive finance can achieve the carbon emission reduction effect through three channels, i.e., the structural adjustment effect at the level of industrial development, the land leasing area reducing effect of the polluting industries at the level of local governments, and the technological innovation effect at the level of corporate development. The result of the expanded analysis shows that digital inclusive finance can alleviate the imbalance problem of carbon emissions among counties, which helps to alleviate the inter-regional resource mismatch to a certain extent. In the future, The governments should further promote the construction of digital infrastructure, boost the application of the new types of digital technologies to the development of digital inclusive finance, so as to promote the transformation of China’s economy from high-speed development to high-quality development.

Key words: digital inclusive finance, carbon emission, industrial structural adjustment, land leasing, technology innovation