Finding effective carbon reduction pathways is an important breakthrough in combating climate warming. In recent years, green financial policies have been recognized as important institutional initiatives globally. In China, the impact of green financial policies on carbon emission reduction and their paths remains to be explored. On the basis of panel data from 30 provinces in China from 2012 to 2018, this paper examines the carbon emission reduction effect of China’s green finance reform and innovation pilot policy (GFRIPP) from the perspective of financial decentralization. China’s GFRIPP has a significant carbon emission reduction effect. Unlike the provinces that did not implement the GFRIPP, the provinces that implemented the GFRIPP experienced a 0.053 reduction in their carbon emission intensity growth rate, and financial decentralization weakened the carbon emission reduction effect of the policy. The impact of GFRIPP on carbon emissions also has significant regional heterogeneity. The carbon emission reduction effect of GFRIPP in the central and western regions is more significant than in the eastern region and is more vulnerable to the weakening impact of financial decentralization. On the basis of the above conclusions, the role of green finance in promoting carbon emission reduction should be given more attention, the communication between central and local policies should be strengthened, a scientific green financial system should be formulated and implemented, and carbon neutrality must be achieved.