Study on the Carbon Emission Reduction Effect of China’s Commercial Circulation Industry

Abstract

The circulation industry, centered on the flow of commodities and supported by logistics, information, and capital flows, serves as a vital link between production and consumption, playing a pivotal role in enhancing production efficiency and facilitating economic transformation and upgrading. Through the spatial aggregation and interconnection of industries such as wholesale and retail, logistics, and catering, the circulation industry forms an economic system characterized by spatial cohesion and resource sharing, thereby significantly impacting carbon emissions through improved production efficiency. This study integrates both the “production side” and “consumption side” into an analytical framework examining the relationship between the circulation industry and carbon emissions. It looks into the mechanisms underlying the industry’s influence on carbon reduction and empirically tests these mechanisms using systematic estimation methods based on data from 30 Chinese provinces spanning 2011 to 2020. The results reveal a pronounced carbon reduction effect within the circulation industry, which intensifies across quantiles, exhibiting regional disparities with stronger effects in central regions compared to eastern regions and insignificant effects in western regions. On the production side, the circulation industry significantly reduces carbon emissions through scale, technology, and structural effects. Conversely, on the consumption side, while the upgrading of rural residents’ consumption structure exhibits a carbon emission suppression effect, the same upgrade among urban residents leads to an enhancement of carbon emissions. The primary contribution of this study lies in constructing an analytical framework that explores the nexus between the circulation industry and carbon emissions. It empirically validates the mechanisms through which the industry impacts carbon emissions at both the production and consumption ends, uncovering regional heterogeneities in carbon reduction efforts. This work provides novel theoretical insights and empirical evidence that can inform global carbon reduction strategies.