The economy-carbon nexus in China: A multi-regional input-output analysis of the influence of sectoral and regional development

Abstract

China has become the world's largest carbon dioxide (CO2) emitter. Sectoral production activities promote economic development while also adding considerably to national CO2 emissions. Due to their different sectoral structures, each region shows different levels of economic development and CO2 emissions. The Chinese government hopes to achieve the dual objectives of economic growth and CO2 emissions reduction by encouraging those sectors that have high economic influence and low environmental influence. Based on the above background, this study constructed an inter-regional sectoral economic influence coefficient (REIC) and a CO2 emissions influence coefficient (RCIC) based on the basic multi-regional input-output (MRIO) model to analyse the economy-carbon nexus of 17 sectors in 30 regions in China in 2010. The results showed that most Chinese sectors and regions had low CO2 emissions influences in 2010. However, some sectors showed negative environmental influences. Specifically, the mining-related sectors showed high CO2 emissions influence with low economic influence. It is encouraging that some light industry and high-end equipment manufacturing sectors had low CO2 emissions influence with high economic influence. For regions, geographic location and past preferential policies are the most important factors influencing local economic growth and CO2 emissions reduction. Most inland regions have low economic influence with high or low CO2 emissions influence. Meanwhile, most coastal regions showed high economic influence with low CO2 emissions influence. Finally, we propose some policy implications for sectors and regions.