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Green Growth, Carbon Intensity Regulation, and Green Total Factor Productivity in China

Abstract:
Based on input-oriented Malmquist productivity index and parametric decomposition approach, this paper measures China's green total factor productivity (TFP) index and its growth sources using a panel dataset of 30 provinces of China mainland from 1997 to 2014, and assesses the effect of CO2 intensity regulation on the green TFP growth in China. The results show that the green TFP has been growing at a yearly averaged rate of –1.51% during this period. The results also indicate that the policy of CO2 intensity regulation does not generate significant effect on the green total factor productivity of China's provinces when using the two stage least squares (2SLS) estimator to control for the potential endogeneity biases. On the other hand, there exists significant heterogeneity in the effect of the CO2 intensity regulation on the green TFP of China's provinces. Specifically, the CO2 intensity regulation promotes the green development performance of provinces in the eastern area, while it does not generate obvious impacts on the green TFP of provinces in both central and western areas.

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Keywords: Green Growth, CO2 Intensity Regulation, Green Total Factor Productivity, China

DOI: 10.5547/01956574.43.6.xshe

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Published in Volume 43, Number 6 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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