How does economic agglomeration affect carbon emissions at the county level in Liaoning China?

Abstract

China's regional economic development has become a regional agglomeration model. The implementation of urbanization strategies promotes spatial concentration and catalyzes economic agglomeration. Due to the heterogeneity of economic development at various spatial scales, economic agglomeration has different environmental externalities. Peak carbon and carbon neutrality make it vital to explore these externalities in China's urbanization process, especially at smaller scales. This study uses a long time series of macro data for 42 counties in Liaoning Province and constructs a dynamic spatial panel Dubin model to assess the impact of economic agglomeration on carbon emissions, showing that agglomeration and emissions exhibit an “inverted N-shaped” curve at the county level. There is a threshold of emission increases and reductions for economic agglomeration. When economic agglomeration exceeds a threshold, it shows a significant emission reduction effect. After further decomposition of spatial effects, economic agglomeration affects carbon emissions through two channels: the direct and the indirect effect with urbanization as a mediator. There are also spillover effects of economic agglomeration on carbon intensity, meaning that economic agglomeration impacts carbon emissions in the region and surrounding areas. The results provide a reference for development guidelines and emission reduction policies at the county level, emphasizing the need to balance the economy and the environment in county regional development.