Path-breaking industrial development reduces carbon emissions: Evidence from Chinese Provinces, 1999–2011

Abstract

The secondary industry has been a major contributor to energy consumption and carbon emissions, whereas relatively few studies have empirically analyzed how different evolution patterns of the secondary industry could affect carbon emissions. By taking China as a case study, this paper investigates the relationship between carbon emissions and path-breaking industrial development at the provincial level. Here the development of a province's secondary industry is considered more path-breaking if the newly-developed subsectors of the secondary industry are less related with its existing subsectors. Drawing upon the concept of industrial relatedness and fine-grained data on the development of 183 three-digit and 505 four-digit subsectors of China's secondary industry, this paper measures the path-breaking development level of the secondary industry of 30 Chinese provinces between 1999 and 2011. The empirical results show that path-breaking development of the secondary industry reduces carbon emissions of Chinese provinces. Moreover, the impact of path-breaking industrial development is much stronger for provinces that have higher output of energy-intensive industries. The results suggest that, rather than curbing the growth of the secondary industry, promoting path-breaking industrial development can be an alternative and effective way to reduce carbon emissions especially for provinces that rely heavily on the secondary industry.