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Can expanding natural gas infrastructure mitigate CO2 emissions? Analysis of heterogeneous and mediation effects for China

Kangyin Dong (), Xiucheng Dong and Xiaohang Ren

Energy Economics, 2020, vol. 90, issue C

Abstract: To verify whether the expansion of natural gas infrastructure can effectively mitigate carbon dioxide (CO2) emissions in China, this study first investigates the impact of natural gas infrastructure on China's CO2 emissions by employing a balanced panel dataset for 30 Chinese provinces covering 2004–2017. Fully considering the potential heterogeneity and asymmetry, the two-step panel quantile regression approach is utilized. Also, to test the mediation impact mechanism between natural gas infrastructure and CO2 emissions, this study then analyzes the three major mediation effects of natural gas infrastructure on China's CO2 emissions (i.e., scale effect, technique effect, and structure effect). The empirical results indicate that expansion of the natural gas infrastructure can effectively mitigate China's CO2 emissions; however, this impact is significantly heterogeneous and asymmetric across quantiles. Furthermore, through analyzing the mediation impact mechanism, the natural gas infrastructure can indirectly affect CO2 emissions in China through the scale effect (i.e., gas population and economic effects) and structure effect (i.e., energy structure effect). Conversely, the technique effect (i.e., energy intensity effect) brought by natural gas infrastructure on CO2 emissions in China has not been significant so far. Finally, policy implications are highlighted for the Chinese government with respect to reducing CO2 emissions and promoting growth in the natural gas infrastructure.

Keywords: Natural gas infrastructure; CO2 emissions; Mediation impact mechanism; Heterogeneity and asymmetry; Two-step panel quantile regression (search for similar items in EconPapers)
JEL-codes: C31 Q40 Q43 Q54 R11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:90:y:2020:i:c:s0140988320301705

DOI: 10.1016/j.eneco.2020.104830

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