Is emission intensity of carbon dioxide (CO2) spatially correlated? What determines the CO2 intensity at a provincial level? More importantly, what climate and economic policy decisions should the China's central and local governments make to reduce the CO2 intensity and prevent the environmental pollution given that China has been the largest emitter of CO2? We aim to address these questions in this study by applying a dynamic spatial system-GMM (generalized method of moment) technique. Our analysis suggests that provinces are influenced by their neighbours. In addition, CO2 intensities are relatively higher in the western and middle areas, and that the spatial agglomeration effect of the provincial CO2 intensity is obvious. Our analysis also shows that CO2 intensity is nonlinearly related to GDP (gross domestic product), positively associated with secondarysector share and FDI (foreign direct investment), and negatively associated with population size.Important policy implications are drawn on reducing carbon intensity.
This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central gove investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.JEL classification: H54, C33, R0
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