The Realistic Way to the Decoupling of Carbon Dioxide Emissions from Economic Growth in China’s Service Sector

Lu-Xuan Sun, Miao Wang, Yin-Shuang Xia and Chao Feng

Emerging Markets Finance and Trade, 2023, vol. 59, issue 3, 786-799

Abstract: Service sector development in China has increased the demand for energy and, potentially, carbon dioxide (CO2) emissions. However, there are no studies on decoupling and its determinants in China’s service sector from the point of view of technology and efficiency. A decoupling indicator based on the extended Kaya identity and production decomposition analysis was innovatively adopted to examine the relationship between service CO2 emissions and economic growth. The results show that: (1) the decoupling state of China’s service sector fluctuated from 2000 to 2008, was stable from 2008 to 2012 in the expansive coupling state, and finally stepped onto a stable state of weak decoupling from 2012 to 2019; and (2) during the sample period, the rapid expansion of the economy scale was the primary inhibiting factor for decoupling, while the decline in potential energy intensity and the progress in energy-saving technology effect was the key promoters. Furthermore, scenario analysis indicates that the possibility of decoupling energy growth from service CO2 emissions significantly relies on technological progress and efficiency improvements. China should focus on technology and efficiency, reduce energy intensity, and strengthen provincial cooperation to reduce service CO2 emissions.

Date: 2023
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DOI: 10.1080/1540496X.2022.2119842

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