Decomposing the decoupling of CO2 emissions and economic growth in China’s iron and steel industry

Abstract

Building a low-carbon industry is essential for the development of a sustainable economy. To study the relationship between carbon emissions and economic growth of China’s iron and steel (IS) industry, this paper first measures the decoupling relationship between carbon emissions and added value of the IS industry from 2001 to 2016 based on the Tapio decoupling model. The causal-chain decomposition model is then used to decompose the decoupling index into different factors. Results show that carbon emissions and economic growth of the IS industry have mostly weak decoupling. For the influencing factors, decoupling elasticities of emission reduction and value creation exert negative impacts on overall decoupling, and the former one plays a bigger role. Decoupling elasticities of energy electricity and industrial electrification positively improve the total decoupling, but the effect is not stable yet and needs to be further enhanced. Finally, the grey Verhulst model is used to predict the decoupling state by the end of 2025. Forecasting results show that industry will still be in a weak decoupling, but the decoupling state will get better over time. Corresponding policy suggestions are posited based on the empirical findings to facilitate the green and low-carbon development of the IS industry.