Heterogeneous Driving Factors of Carbon Emissions Embedded in China’s Export: An Application of the LASSO Model

Abstract

With the steady growth of CO2 emissions embedded in trade, the driving forces of emissions have attracted extensive attention. Most of the literature has verified a bundle of the influential factors; however, further analyses are necessary to understand the predominant and heterogeneous driving factors in different economies and/or industries. Accordingly, by applying the multiregional input–output (MRIO) model, this article firstly evaluates the embodied carbon emissions of China’s export from 1992 to 2020 in total volumes and by 14 industries. Then, the Least Absolute Shrinkage and Selection Operator (LASSO) estimations allow us to discover that urbanization, technology update and gross domestic product (GDP) are the leading three prioritizing factors in generating China’s export emissions. Interestingly, this paper discovers that raising the proportion of female parliamentarians contributes to an abatement of emissions. Furthermore, the empirical results suggest that the heterogeneities of those factors do exist among industries. For example, the percentage of females in parliaments turns out to have a larger effect among labor-intensive industries only. In facing with rapid globalization and economic development of China, this paper provides important policy implications towards specific industries in terms of mitigating trade emissions. It guides policy-makers to achieve “carbon neutrality” by avoiding carbon leakage in net-export countries such as China.