Effective ways to reduce CO2 emissions from China's heavy industry? Evidence from semiparametric regression models

Using China's province-level panel data from 2005 to 2017, this article uses a semiparametric regression model to investigate CO2 emissions in China's heavy industry. Empirical results show that while economic growth exerted carbon reduction effects in the eastern region, it stimulated the growth of CO2 emissions in the central and western regions. This is mainly due to regional differences in industrial structure and the high-tech industry. Energy efficiency has made a greater contribution to reducing CO2 emissions in the central region because the R&D investment and patent rights granted in this region has grown faster. The energy consumption structure has a more complex impact. It exerts a “pulling first, then restricting” (Ո-shaped) nonlinear effect on CO2 emissions in the eastern and western regions, but an inverted “N-shaped” effect in the central region. This is mainly due to the differences in the composition of energy consumption across regions. Environmental regulations have a positive “U-shaped” nonlinear impact on CO2 emissions in the eastern and western regions. It means that environmental regulations help cut down CO2 emissions in the early stage, and the facilitation effect gradually disappears at the later stage. Conversely, environmental regulations produce an inverted “U-shaped” impact in the central region.