Can industrial structure optimization and industrial structure transition both lead to carbon lock-in mitigation? The case of China.

Abstract

The optimization and transition of the industrial structure help improve the quality of the economy, moving it toward low-carbon development. By using the Instrumental Variable Generalized Method of Moments model and a city-level dataset covering the period 2006-2019, this paper explores the carbon lock-in mitigation effects of industrial structure optimization and industrial structure transition, respectively. The heterogeneity and the synthetic industrial structure adjustment effect are detected, and the potential impact mechanism is also explored. Some findings have been generated. (1) Both industrial structure optimization and industrial structure transition realize carbon lock-in eradication. (2) Industrial structure optimization and transition are more effective in inhibiting carbon lock-in in cities with a higher level of economic background. (3) By generating an interaction term of industrial structure optimization and transition and examining the impact of the interaction term on carbon lock-in, this paper detects that industrial structure optimization and transition have a synthetic impact on carbon lock-in, showing a "1 + 1 > 2" effect. (4) Industrial structure optimization and transition both affect carbon lock-in by improving technological innovation level, which is the impact mechanism. Some policy implications, such as sectoral diversification and promoting research and development, are put forward for better industrial structure development and carbon unlocking.