How Does Industrial Upgrading Affect Carbon Productivity in China’s Service Industry?

Abstract

Promoting carbon productivity is an effective way to reduce carbon emissions. The existing literature focuses mainly on the carbon productivity of heavily polluted sectors, such as heavy industry, the manufacturing industry, and the construction industry. With the deepening of China’s economic transformation and industrial upgrading, the service industry plays an increasingly important role in the national economy, and the ratio and amount of carbon emissions in the service industry show an upward trend. In order to effectively achieve the goal of energy conservation and emission reduction, it is necessary to study how industrial upgrading affects the carbon productivity in the service industry. This study uses a spatial autoregressive panel model to investigate the carbon productivity in China’s service industry. The empirical results are summarized as follows: (1) the carbon productivity of China’s service industry is on the rise, and there exist regional heterogeneity and spatial dependence; (2) industrial upgrading has a significant positive effect on the carbon productivity in China’s service industry; (3) the positive effect of industrial upgrading in the eastern (northern) region is higher than that in middle and western (southern) regions in the service industry; and (4) environmental regulation and economic development have positive moderating effects in the process of industrial upgrading. Accordingly, some targeted policy suggestions are put forward.