Environmental Awareness And Green Finance

With the deteriorated pollution situation,how to use green finance to promote green development is an urgent issue to the wholde society.Awareness is the basis of behavior.Environmental awareness can affect green consumption and green investment.But,few researchers have studied the effects of environmental awareness on green finance.For now,environmental awareness data is poor,which makes the research of environmental awareness and green finance become tough.In fact,Internet data has an excellent performance in representing awareness,which can help represent environmental awareness.However,when we use Internet data,we always encounter high dimension,and the variables are connected to each other.Traditional methods ignore the variables network structure,we need network-based variable selection and dimension reduction methods which consider the variables network relationship while dealing with high dimension.In this paper,we constructed a comprehensive index of environmental awareness to reflect the public environmental awareness and analyzed the effects of environmental awareness on green finance,which were based on Internet data and network-based variable selection and dimension reduction methods.Our paper is mainly organized as follows:(1)Traditional environmental awareness measurement methods have many limitations.This paper studied how to use the Internet search volume of the keywords from environmental awareness questionnaire to help construct a comprehensive index of environmental awareness that can be used to reflect Chinese national environmental awareness level,which solved the dilemma of lack of environmental awareness data.A large number of keywords bring high dimension,and the traditional dimension reduction method ignored the interaction between variables.This paper considered the variables network relationship while reducing the dimension and designed the model that was most suitable for building a comprehensive index of environmental awareness.After analyzing the influencing factors of environmental awareness,it was found that economic growth had a significant positive impact on environmental awareness.(2)The Paris Agreement is a new agreement on climate change and conveys a strong signal that the world will transform into a green and low-carbon economy.Financial market is very sensitive to policy,and the price of financial securities affects the financing of green enterprises and heavily polluting enterprises.But,few people have studied the effects of the Paris Agreement on China's financial securities market and the regulatory role of environmental awareness.This paper fills this gap.The study found that the Paris Agreement had a short-term positive impact on the return of green companies,but there was no medium-long term effect.The Paris Agreement also had a short-term negative impact on the return of heavily polluting companies,but the price had not been depressed for a long time.The government's attention and the media's large coverage of the Paris Agreement were important reasons for the short-term good performance of green stocks.The extra cost of reducing emissions was an important reason for the short-term poor performance of heavy polluting stocks.However,the media's non-continuous reporting and investors' lack of attention to the Paris Agreement made green enterprises unable to benefit in the long run.The low-carbon transition of heavy polluting enterprises stimulated by environmental policies and the failure of China's environmental information disclosure policy in the A-share market made heavy polluting enterprises not to perform poorly in the long run.By analyzing the regulatory role of public environmental awareness on the relationship between the Paris Agreement and financial securities prices,we found that the short-term positive effect of the Paris Agreement on the price of green corporate securities and the short-term negative effect on the price of heavily polluting enterprises became more apparent when the public environmental awareness was stronger.The conclusion of the study has certain policy implications for environmental protection departments to think about how to guide green investment and restrict polluting investment.(3)In order to reduce the risk of carbon trading,enhance the vitality of the carbon market,and promote the development of carbon finance,this paper proposed a network-based prediction model by using the Internet data of environmental awareness index,which improved the accuracy of predicting carbon price.Because of the interrelationship between variables,the new model considered the network structure between variables while estimating parameters and selecting variables.Both simulation experiments and empirical analysis showed that the new model was superior to other models,which not only obtained higher prediction accuracy,but also identified key factors affecting carbon price.We provide a new model for predictive research based on Internet data and an empirical basis for carbon price research.