Structural Transformation in Supply and Demand and Carbon Emission Reduction Effect from the Perspective of Dual Circulation
The report to the 20th National Congress of the Communist Party of China proposed that"a green and low-carbon economy and society are crucial to high-quality development"and that"reaching peak carbon emissions and achieving carbon neutrality will mean a broad and profound systemic socio-economic transformation."It is imperative to understand the evolution pattern of China's carbon dioxide emission in achieving the carbon peaking and carbon neutrality goals.The study proposes a new theoretical mechanism and empirical evidence for this from the perspective of dual circulation with structural transformation in supply and demand.We find that,in China's economy,there are salient differences in the amount or intensity of carbon emission between different industries on the supply side and between different types of demand on the demand side.Moreover,the amount or intensity of carbon emission within each industry or type of demand experiences a trending pattern.Based on these facts,we present a development accounting framework to decompose the amount or intensity of carbon emission in the supply or demand side of a country into every industry or type of demand.We also construct a database of carbon emissions in every country's production for a specific type of demand in a specific country using the world input-output tables and environmental accounts.We combine the database and framework to quantitively investigate the trend of China's carbon emissions and the role of the structural transformation behind it.First,we propose that factors driving structural transformation in the supply or demand side may affect carbon emission through this channel.The mechanism can be decomposed into intensive and extensive margin effects.The intensive margin effect reflects the effect of changes in the intensity of carbon emission within different industries or types of demand.The extensive margin effect is the effect of changes in the shares of different industries or types of demand,which reflects the role of structural transformation in the supply or demand side of the economy.Second,we find that the industry of electricity,gas,steam,and water production and supply and the industry of primary products manufacturing contribute most to the rising trend of the amount of China's carbon emissions on the supply side.The intensive margin effects of the two industries also contribute most to the decrease in the intensity of carbon emission,and the intensive margin effect of services and the extensive margin of structural transformation on the supply side both play an influential role.In the demand side of China's economy,the effect of the investment channel is more important than the consumption channel in the rising carbon emissions,and the intensive margin effects of both types of demand are significant for the decrease in the intensity of carbon emissions.We further find that the industry of electricity,gas,steam,and water production and supply and the industry of primary products manufacturing also contribute a lot to the rising trends of the amount of carbon emission,either from consumption or investment,and the intensive margin effects of the two industries are the most important factors driving the intensity of carbon emissions down.Third,from the perspective of dual circulation,international trade may cause the amount or intensity of carbon emissions in the production process in one country to be different from what is required to meet the demand of the country.We find that from 2000 to 2014,the contribution rate of export(net export)to China's carbon emissions was as high as 20％to 30％(10％to 25％),with the industry of machinery and equipment playing the most important role.In contrast,the contribution rate of imports was less than 10％in most years,either for consumption or investment.In consumption,the most important industry is machinery and equipment,while in investment,it is the services.We conclude that achieving the carbon peaking and carbon neutrality goals is not only related to the innovation of energy substitution or energy use techniques but also an important development question about how we promote the process of structural transformation and industrial upgrade and allocate resources.Thus,we derive policy implications for China to conduct carbon peaking action.
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