Is high natural resource dependence doomed to low carbon emission efficiency? Evidence from 283 cities in China

Abstract

With the increasing concerns of global economic recovery and climate change, the improvement of carbon emission efficiency has become extremely significant to get rid of economic and environmental dilemmas. Although natural resource development is usually carbon-intensive, little attention has been paid to the impact of natural resource dependence on the carbon emission efficiency. Based on the resource curse theory and the stylized facts of resource-based regions in China, for the first time, this paper proposes the hypothesis of the carbon emission efficiency curse. The hypothesis suggests that an increase of natural resource dependence can suppress the carbon emission efficiency by crowding out green technological innovation, curbing the carbon productivity of investment, and reducing population density. Furthermore, we verify the hypothesis using the instrumental variable approach and the panel data of 283 cities in China from 2004 to 2017. The results demonstrate the negative effect of natural resource dependence on the carbon emission efficiency. This finding remains robust after replacing the indicators of the key variables, altering the estimation method, and eliminating the disturbances resulting from particular samples and the low-carbon policy. The mechanism analysis indicates that natural resource dependence can crowd out green technological innovation, restrain the carbon productivity of investment, and lower population density to curb the improvement of the carbon emission efficiency. In addition, the heterogeneity analysis shows that although the carbon emission efficiency curse exists significantly in resource-based cities on average, renewable resource-based cities successfully avoid the carbon emission efficiency curse because of the optimization and transformation of economic development mode. Meanwhile, the negative impact of natural resource dependence on the carbon emission efficiency is not significant in the Two Control Zone cities and key cities for air pollution prevention and control, implying that environmental regulations are conducive to avoiding the carbon emission efficiency curse. This paper provides a novel perspective for the carbon emission efficiency improvement and low-carbon transition of China and other developing countries.