Uncovering the key mechanisms of differentiated carbon neutrality policy on cross-regional transfer of high-carbon industries in China

Abstract

The carbon peaking and carbon neutrality strategy have become China's national strategy. Given the significant regional differences in China, the Chinese government has proposed “one policy for one province” guiding principle for carbon emission reduction. This study takes Tianjin as a representative of “a province-level city with high degree of industrialization and prominent emerging industries”, and Gansu Province a representative of “a province with a low degree of industrialization but the potential for green energy”. Using the integrated modeling frameworkthis study conducts a comparative analysis of the hidden flows generated by inter-provincial inward and outward transfers and extracts a feasible model for carbon neutrality transformation. The study also focuses on carbon emission, GDP changes, carbon hidden flow change in trade and carbon emission reduction path. By comparing the results, this study identifies the mechanism of the industrial spillover effect and carbon emission spillover effect between the two regions. Then it concludes the “cross-regional transfer mode of high-carbon industries” of industrial carbon neutral transformation: more carbon emission allowances are allocated to developing regions represented by Gansu Province, implement regionally differentiated carbon emission reduction constraint policies, and achieve industrial spatial transfer through more inter-provincial transfer. The paper found that in implementing a regionally differentiated carbon emission reduction constraint policy (DE scenario), the transfer of high-carbon industries can achieve the “superposition effect” through inter-provincial transfer. Accordingly, three carbon policy mechanisms for cross-regional transfer of high-carbon industries are summarized.