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

Hui Wang, Chen Pan, B.W. Ang, and Peng Zhou

Year: 2021
Volume: Volume 42
Number: Number 2
DOI: 10.5547/01956574.42.2.hwan
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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.





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