Forecasting interactive relationships and long-term equilibrium of CO2 emissions in industrial interdependent regions

Abstract

This is the first study that analyses the interactive relationships of carbon dioxide (CO2) emissions between China and Taiwan, two industrial dependent regions, by applying Lotka-Volterra equations. The results of our investigation show that the industrial interdependence between Taiwan and China only significantly affects CO2 emissions of China, but has no impact on Taiwan’s CO2 emissions growth rate. In the past few decades, China has greatly improved its infrastructure which attracted enterprises worldwide to set up factories in China. When Taiwanese industries transferred their products manufactured in China, the CO2 emissions generated by these productions increase substantially. In addition, the result of equilibrium analysis and Lyapunov functions further reveals that the future trend of annual CO2 emissions from China and Taiwan will tend to reach a stable long-term equilibrium point, implying that the excessive CO2 emissions from Taiwan and China will be efficiently controlled by environmental protection policies and technology improvement on low-carbon energies. In terms of forecast accuracy, the proposed Lotka-Volterra equations predict future CO2 emissions from China and Taiwan more accurately than the Bass model since the Lotka-Volterra equations take CO2 emissions in each region and the correlations of CO2 emissions between different industrial dependent regions into consideration.