In the context of increasingly more countries actively advocating and investing in global climate governance actions, accurately examining the carbon emission effect of climate finance is of great significance for promoting sustained assistance from developed countries, laying out the post-2020 climate action, and building a community with a shared future for mankind. Based on the AidData, OECD-DAC CRS, and WDI database, this study obtained a national panel dataset of 77 recipient countries from 1980 to 2014. By constructing static and dynamic panel models, a moderating effect model, and a panel threshold model, this study investigated the impact of global climate finance on carbon emissions of recipient countries, and tested the moderating effect of income level between the above two. The results show that: (1) In general, climate finance had a significant negative impact on recipient countries’ carbon emissions, and the income level of recipient countries had a significant moderating effect on the carbon emission effect of climate finance. (2) With the increase of recipient countries’ income level, the carbon emission effect of climate finance shows a nonlinear characteristic of “from significant carbon reduction to insignificant carbon increase effect”. The recipient countries that achieved carbon reduction were mainly a few African countries. (3) To evaluate whether climate finance can achieve carbon reduction effect, the interaction between climate finance and recipient countries’ production and investment needs to be taken into account. Based on the above results, this study provided policy implications in terms of actively urging the implementation of relevant climate finance commitments, promoting low-carbon economic growth in recipient countries, and fully engaging in global climate governance through China’s dual identity.