The North-South industrial transfer of manufacturing and the pattern of carbon emissions in China

Abstract

In recent years, the gap between the north and the south of China has been expanding, showing a decreasing proportion of value-added and an increasing proportion of carbon emissions in the north of China, and vice versa in the south of China. Based on the most recent inter-provincial input-output table of China in 2012 and 2017, this paper focused on the North-South industrial transfer of manufacturing, quantified its impact on regional carbon emissions, and decomposed the path of impacts. The results suggest that the North-South industrial transfers of China during 2012-2017 indeed aggravated the imbalance of carbon emissions in the north and the south of China. Further explorations of path decompositions show that the spillover effect through production linkages is the major path where industrial transfer influences regional carbon emissions, particularly in the north of China. The results provide insightful policy implications for the achievement of carbon emissions reduction targets in China as well as the globe.