The Dynamic Relationship Between Industrial Structure Upgrading and Carbon Emissions: New Evidence from Chinese Provincial Data

Yuelin Zheng, Mingquan Wang, Xiaohua Ma, Chunhua Zhu and Qibing Gao ()
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Yuelin Zheng: School of Mathematical Sciences, Nanjing Normal University, Nanjing 210023, China
Mingquan Wang: School of Mathematical Sciences, Nanjing Normal University, Nanjing 210023, China
Xiaohua Ma: School of Mathematical Sciences, Nanjing Normal University, Nanjing 210023, China
Chunhua Zhu: School of Statistics and Data Science, Nanjing Audit University, Nanjing 211815, China
Qibing Gao: School of Mathematical Sciences, Nanjing Normal University, Nanjing 210023, China

Sustainability, 2024, vol. 16, issue 22, 1-19

Abstract: Industrial structure upgrading (ISU) plays a critical role in reducing carbon emissions (CO 2 emissions); however, the existing literature lacks dynamic research on the relationship between the two. Based on provincial panel data from China between 2002 and 2021, this paper establishes a time-varying coefficient two-way fixed-effects model to empirically explore the dynamic effects of ISU on CO 2 emissions. The findings indicate that the overall impact of China’s ISU on CO 2 emissions demonstrates a dynamic tendency of initially promoting and subsequently inhibiting such emissions and, since 2016, ISU has had the ability to significantly reduce CO 2 emissions. This time-varying trend is highly related to the evolving direction and stage of the ISU. During the initial stage of ISU, dominated by industrialization, the promotional effect is dominant in terms of CO 2 emissions, but with the development of tertiary and emerging industries, its inhibitory effect is continuously enhanced and, eventually, ISU can significantly suppress CO 2 emissions. Further, regional heterogeneity analysis shows that in the eastern and western regions of China, ISU has always inhibited CO 2 emissions, while in the central and northeastern regions, ISU first promotes and then inhibits CO 2 emissions, which is similar to the overall pattern in China. Based on these findings, relevant policy suggestions are provided to promote sustainable economic and environmental development.

Keywords: carbon emissions; industrial structure upgrading; time-varying coefficient two-way fixed effects; panel data (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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