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

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  • Dong, Kangyin
  • Dong, Xiucheng
  • Ren, Xiaohang

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.

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  • Dong, Kangyin & Dong, Xiucheng & Ren, Xiaohang, 2020. "Can expanding natural gas infrastructure mitigate CO2 emissions? Analysis of heterogeneous and mediation effects for China," Energy Economics, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:eneeco:v:90:y:2020:i:c:s0140988320301705
    DOI: 10.1016/j.eneco.2020.104830
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    More about this item

    Keywords

    Natural gas infrastructure; CO2 emissions; Mediation impact mechanism; Heterogeneity and asymmetry; Two-step panel quantile regression;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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