Government Intervention, Structural Transformation, and Carbon Emissions: Evidence from China

Abstract

Government intervention and structural transformation play an important role in both the economy and carbon emissions. Based on provincial panel data from China from 2003 to 2020, this paper employs econometric models to investigate the impact of government intervention and structural transformation on carbon emissions. In particular, structural transformation is divided into two indicators: The rationalization of the industrial structure and the upgrading of the industrial structure. According to the research findings, government intervention has significantly promoted carbon emissions and structural transformation has had dual effects on carbon emissions; meanwhile, the rationalization of the industrial structure has significantly increased carbon emissions, while the upgrading of the industrial structure has slowed down carbon emissions, with these findings passing the corresponding robustness test. The relationship between government intervention, structural transformation, and carbon emissions varies significantly over time and across regions. Further investigations revealed that government intervention and structural transformation have a significant impact on carbon emissions in various panel quantiles. Finally, the paper makes policy recommendations in order to provide empirical support for promoting China’s high-quality economic development and achieving the “double carbon” goal.