Carbon emission reduction potential and reduction strategy of China's manufacturing industry

Abstract

China's carbon reduction targets have been hampered primarily by excessive CO2 emissions from manufacturing. Considering technology heterogeneity, this study first employs the directional distance function (DDF) meta-frontier approach to evaluate the manufacturing carbon emission efficiency and carbon reduction potential in 29 Chinese provinces from 2011 to 2019. We also discuss the influencing factors affecting carbon emission efficiency using the spatial econometric model. The results indicate that: (1) China's manufacturing industry is not very efficient in terms of carbon emissions. The Eastern region exhibits a significantly higher level of performance than the Central and Western regions in carbon emission efficiency and production technology, although the gap is gradually narrowing. (2) The potential for reducing carbon emissions in China's manufacturing sector is considerable, with the greatest potential found in the Western region. Specifically, in the Eastern region, the carbon reduction potential is largely associated with management inefficiency. However, in the Central and Western regions, excessive carbon emissions are mainly due to technology gap inefficiency. (3) Through spatial econometric analysis, we find that carbon emission efficiency can be derived by adjusting the industrial structure, scaling up enterprises, accelerating urbanization, and reducing coal use. But it will be hindered by increased marketization and strict environmental regulations. Besides, China is not enough to improve carbon emission efficiency through technology introduction and technological innovation at present. Some manufacturing carbon emission reduction strategies are proposed based on the results of this study.