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Driving factors of CO2 emission inequality in China: The role of government expenditure

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  • Fan, Wei
  • Li, Li
  • Wang, Feiran
  • Li, Ding

Abstract

China has reached a consensus regarding the total control of carbon dioxide (CO2) emissions; however, regional emission inequalities still exist. The reduction of carbon emissions is a public good and indicates a strong positive externality, which is difficult to solve within the market. Such reductions are highly dependent on governmental contributions. Therefore, using the Theil index and the logarithmic mean Divisia index decomposition approach, this paper integrates government expenditure into an analysis framework, investigating the driving factors of emission inequality and the status and changes of China's CO2 emission inequality from 2007 to 2015, attributing emission inequality to disparities in governmental expenditures, energy consumption, and other socioeconomic factors. The empirical results show that imbalances in economic development, population distribution, and energy structure were prerequisites for a regional emission inequality, while disparities in government expenditure also played an important role. Among these factors, disparities in the expenditure structure were the main cause for emission inequality. The findings of this paper provide guidelines for the government to set carbon emission reduction quota and implement reasonable differentiated emission reduction policies.

Suggested Citation

  • Fan, Wei & Li, Li & Wang, Feiran & Li, Ding, 2020. "Driving factors of CO2 emission inequality in China: The role of government expenditure," China Economic Review, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:chieco:v:64:y:2020:i:c:s1043951x20301425
    DOI: 10.1016/j.chieco.2020.101545
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    More about this item

    Keywords

    Emission inequality; Government expenditure; Driving factor; Decomposition analysis; Theil index;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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