Spatial spillover effects in determining China's regional CO2 emissions growth: 2007-2010

This study proposes an alternative input-output based spatial structural decomposition analysis to elucidate the importance of domestic regional heterogeneity and inter-regional spillover effects in determining China's regional CO2 emissions growth. Our empirical results, based on the 2007 and 2010 Chinese inter-regional input-output tables, show that changes in most regions' final demand scale, final expenditure structure, and export scale have positive spatial spillover effects on other regions' CO2 emissions growth; changes in most regions' consumption and export preference help reduce other regions' CO2 emissions; changes in production technology and investment preferences may exert positive or negative effects on other region's CO2 emissions growth through domestic supply chains. For some regions, the aggregate spillover effect from other regions may be larger than the intra-regional effect in determining regional emissions growth. All these facts can significantly help provide a better, deeper understanding of the driving forces behind the growth of regional CO2 emissions and can thus enrich the policy implications concerning a narrow definition of “carbon leakage” through domestic inter-regional “trade” as well as a relevant political consensus about responsibility sharing between developed and developing regions inside China.