The influences of openness on China's industrial CO₂ intensity

As a main cause of global warming, carbon emissions have received growing concerns of Chinese government. As the main sources of carbon emissions, industrial sectors account for approximately 70% of China's total emissions. In this study, the effect of openness involving foreign direct investment, together with import and export on the industrial CO₂ intensity, is comprehensively analyzed from the technology spillover perspective. Employing a panel dataset of 34 industrial sectors for the period of 2000-2010, linear regression analysis by fixed effects, the feasible generalized least squares estimator, and the Driscoll-Kraay estimator are employed. The estimation results indicate that the openness is conducive to low-carbon development except export. A further investigation conducted by employing the panel threshold model suggests that the influences of openness on the industrial CO₂ intensity are dependent on the specific characteristics of the industrial sectors, such as the domestic innovation and the level of foreign investment entering in China's industrial sectors. These findings allow the relevant policy makers to carry out insightful policies aimed at pursuing low-CO₂ intensity by considering the characteristics and situations of the local absorptive ability.