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.