Carbon emissions dynamics, efficiency gains, and technological innovation in China's industrial sectors

Abstract

In China, industrial sectors contribute carbon emissions at a larger scale and more rapidly growing pace than other end-use sectors. This paper thus aims to investigate the dynamic carbon emissions performance of China's industrial sectors using Malmquist-type index. Previous studies suffer from two limitations: the challenge of isolating carbon emissions performance from radial efficiency measures and the infeasibility problem in the calculation process. This paper proposes the non-radial global Malmquist carbon emissions performance index (NGMCPI) as a way of handling those two challenges with measuring dynamic changes in carbon emissions performance. The NGMCPI can be decomposed into efficiency change (EC) and technological change (TC) indexes, which represent the low-carbon catch-up and innovation effects, respectively. Based on the proposed indexes, we examine the dynamic changes in carbon emissions performance and its patterns for 38 Chinese industrial sectors over the 1990-2012 period. The results show that dynamic carbon emissions performance was mainly driven by the catch-up effect during the 1990s and boosted by innovation from 2000 to 2012. Some policy implications are proposed based on these empirical results.