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Does Global Value Chain Participation Decouple Chinese Development from CO2 Emissions? A Structural Decomposition Analysis

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  • Hui Wang
  • Chen Pan
  • B.W. Ang
  • Peng Zhou

Abstract

Decoupling economic activities and CO2 emissions is central to achieving the climate goals of China. The country’s participation in global value chains has profound impacts on its economy as well as CO2 emissions. Assessing the impacts is fundamental to identifying strategies to decouple China’s development from emissions. To this end, we adopt the multi-region structural decomposition analysis technique to quantify the global value chain determinants of China’s CO2 emission intensity from both the production and consumption perspectives. It is found that China’s decoupling from emissions in 2007-2012 was driven mainly by global value chains. Nonetheless the decoupling slowed down after the global financial crisis. In particular, the value chains within China played a more important role in greening Chinese economy. Despite the considerable improvement in 2007-2012, global value chains remained the primary obstacle to environmental sustainability of China. More detailed results with policy implications are presented.

Suggested Citation

  • Hui Wang & Chen Pan & B.W. Ang & Peng Zhou, 2021. "Does Global Value Chain Participation Decouple Chinese Development from CO2 Emissions? A Structural Decomposition Analysis," The Energy Journal, , vol. 42(2), pages 183-204, March.
    • Handle: RePEc:sae:enejou:v:42:y:2021:i:2:p:183-204
    DOI: 10.5547/01956574.42.2.hwan
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    References listed on IDEAS

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    2. Zhifu Mi & Jing Meng & Dabo Guan & Yuli Shan & Malin Song & Yi-Ming Wei & Zhu Liu & Klaus Hubacek, 2017. "Chinese CO2 emission flows have reversed since the global financial crisis," Nature Communications, Nature, vol. 8(1), pages 1-10, December.
    3. Paul De Boer, 2009. "Multiplicative Decomposition And Index Number Theory: An Empirical Application Of The Sato-Vartia Decomposition," Economic Systems Research, Taylor & Francis Journals, vol. 21(2), pages 163-174.
    4. Wang, H. & Zhou, P. & Xie, Bai-Chen & Zhang, N., 2019. "Assessing drivers of CO2 emissions in China's electricity sector: A metafrontier production-theoretical decomposition analysis," European Journal of Operational Research, Elsevier, vol. 275(3), pages 1096-1107.
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