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Effect of China's western development strategy on carbon intensity

Zhang, Cheng, Zhou, Bo, Wang, Qunwei
Journal of cleaner production 2019 v.215 pp. 1170-1179
capital, carbon, carbon dioxide, environmental law, foreign direct investment, hysteresis, industrialization, industry, urbanization, China
China's western development strategy has led to the relocation of traditional industries from the east to the west, promoting China's economic growth. However, this transition has had complicated impacts on carbon dioxide emission reductions. To evaluate the impact of this development strategy on carbon intensity, we used a propensity score matching (PSM) technique and applied a difference-in-differences (DID) approach. The results highlighted three key points. First, while the impact of western development strategy on carbon intensity varies across different provinces, the strategy generally has no help to the reduction of carbon intensity in west region that has been increasing at an annual rate of 12.2 tons per million yuan. Second, the impact of western development strategy on carbon intensity has a hysteresis effect, which means the strategy deteriorates the carbon intensity of west region before improving it. Third, four intermediate factors: industrialization level, the capital intensity, the degree of urbanization, and strengthen of environmental regulation, strategically improved the carbon intensity of west region. Foreign direct investment (FDI) intensity was an important factor that indirectly helped the strategy to reduce carbon intensity.