Abstract: The financial sector plays a crucial role in supporting a low-carbon economy, and the development of green finance is an indispensable pathway. It is of great significance to explore the effect of green finance on carbon reduction. The Yangtze River Economic Belt (YREB), as a driving force for leading high-quality economic development, serves as the primary battleground for achieving the "dual carbon" goals. A variety of spatial econometric models were used to analyze the panel data of 11 provinces and municipalities in the YREB from 2013 to 2020. The impact of green finance on CO₂ emissions and its spillover effects were explored from a spatial perspective. The results showed that: (1) The development level of green finance showed an obvious spatial correlation in various regions of the YREB, with significant spatial aggregation characteristics. There were spatial spillovers of the impact of green finance, environmental investment, economic development and other factors on the level of CO₂ emissions. (2) The relationship between green finance and CO₂ emission level showed a significant inverted "U" curve. The impact of green finance development level on CO₂ emission level was first promoted and then suppressed. The environmental investment and economic development level negatively regulated the effect of green finance. Furthermore, the dynamic SDM model was used to verify the positive feedback effect of the time dimension of CO2 emissions. (3) Due to different geographical locations and economic developments, green finance demonstrated different impacts on CO₂ emissions in the Yangtze River Delta region and other regions. The impact relationship of the inverted "U" curve was more obvious in other regions outside the Yangtze River Delta. (3) Different geographical location and economic development led to the heterogeneity in the results. Green finance had different impacts on CO₂ emissions in the Yangtze River Delta region and other regions, and the influence of green finance on the inverted "U" curve of CO₂ emissions was more obvious in other regions outside the Yangtze River Delta.