How do China’s lockdown and post-COVID-19 stimuli impact carbon emissions and economic output? Retrospective estimates and prospective trajectories

Shuai Shao, Chang Wang, Kuo Feng, Yue Guo, Fan Feng, Yuli Shan*, Jing Meng*, Shiyi Chen*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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Abstract

This paper develops a multi-sector and multi-factor structural gravity model that allows an analytical and quantitative decomposition of the emission and output changes into composition and technique effects. We find that the negative production shock of China's containment policy propagates globally via supply chains, with the carbon-intensive sectors experiencing the greatest carbon emission shocks. We further reveal that China's current stimulus package in 2021–2025 is consistent with China's emission intensity-reduction goals for 2025, but further efforts are required to meet China's carbon emissions-peaking target in 2030 and Cancun 2°C goal. Short-term changes in carbon emissions resulting from lockdowns and initial fiscal stimuli in “economic rescue” period have minor long-term effects, whereas the transitional direction of future fiscal stimulus exerts more predominant impact on long-term carbon emissions. The efficiency improvement effects are more important than the sectoral structure effects of the fiscal stimulus in achieving greener economic growth.

Original languageEnglish
Article number104328
Number of pages20
JournaliScience
Volume25
Issue number5
Early online date30 Apr 2022
DOIs
Publication statusPublished - 20 May 2022

Bibliographical note

Funding Information:
We acknowledge the financial support from the National Natural Science Foundation of China (Nos. 72121002 , 71922015 , and 71773075 ), Shanghai Soft Science Research Program (No. 22692103400 ), and the Fox International Fellowship at Yale University.

Publisher Copyright:
© 2022 The Author(s)

Keywords

  • economics
  • energy policy
  • energy sustainability

ASJC Scopus subject areas

  • General

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