Restructuring investment to promote a win–win situation for both the economy and the environment in China

Abstract

Effective investment planning is crucial for achieving economic growth while also protecting the environment. An important premise of guiding investors is identifying low-carbon investment sectors; however, no previous research has attempted to discern high- and low-carbon areas at a macro-sector level or conducted a comprehensive assessment with a general equilibrium framework including both status quo and potential effects. Using an environment extended input-output model, structural path analysis model, and China energy and environmental policy analysis model (CEEPA), this study estimates overall carbon emissions driven by unit investment of various sectors in China, highlights the low- and high-carbon investment sectors by developing an investment carbon multiplier indicator, and provides valuable insights for sustainable investment planning by identifying the key sectors and supply chains that require transitions in investment demand and mode. The results show that China is making significant strides toward a greener future, with a shift toward low-carbon investments and economic development. There are currently four typical high-carbon investment sectors and 12 potential low-carbon investment sectors. Investments in agriculture and modern services contribute moderately economically and environmentally. The simulations also reveal that redirecting investments from metal products to computer-related manufacturing represents a promising approach for achieving both economic growth and environmental sustainability, whereas reducing carbon emissions through construction investment will result in socio-economic losses.