Industrial structural transformation and carbon dioxide emissions in China

Using provincial panel data from the period 1995–2009 to analyze the relationship between the industrial structural transformation and carbon dioxide emissions in China, we find that the first-order lag of industrial structural adjustment effectively reduced the emissions; technical progress itself did not reduce the emissions, but indirectly led to decreasing emissions through the upgrading and optimization of industrial structure. Foreign direct investment and intervention by local governments reduced carbon dioxide emissions, but urbanization significantly increased the emissions. Thus, industrial structural adjustment is an important component of the development of a low-carbon economy. In the context of industrial structural transformation, an effective way to reduce a region’s carbon dioxide emissions is to promote the upgrading and optimization of industrial structure through technical progress. Tighter environmental access policies, selective utilization of foreign direct investment, and improvements in energy efficiency can help to reduce carbon dioxide emissions.

► Relationship between the transformation of industrial structure and CO2 emissions in China.
► Dynamic panel data model.
► Industrial structural adjustments can effectively reduce current CO2 emissions.
► Technical progress leads to decreasing CO2 emissions through upgrading of industrial structure.