Heterogeneity analysis of the effects of technology progress on carbon intensity in China

Purpose – The purpose of this paper is to investigate the effects of technology progress on carbon intensity in China. Abatement of carbon emission has become one of the most important targets for the Chinese government. Numerous studies confirm that technology progress is the main factor responsible for reduction in CI. However, very few studies analyze the impacts of technology progress on CI for various regions. There is also inadequate knowledge on the transmission mechanisms of the impacts. These are the motivations for this research. Design/methodology/approach – Given energy consumption and CO2 emissions, an improved MLPI, which stands for the generalized technology progress related to energy and environment, is introduced and decomposed into technical and efficiency changes. Using a panel data of 30 provinces from 1997 to 2012, the authors construct different panel data models to investigate the effects of technology progress (and its decomposition elements) on CI. Findings – Results show that technology progress is conducive for reducing CI, with the main factor being technical change. It also finds that the two components of technology progress have completely different effects in the three regions of China. Dynamic panel data models with threshold effects indicate that capital deepening enforces and weakens the negative effects of technical change and efficiency change on CI. Originality/value – The above conclusions provide new evidences for policy-makers with respect to capital deepening, technical innovation and allocative efficiency enhancement with a view to achieving CI reduction.