The Driving Force of CO2 Reduction in China’s Industries


  • Lu Liu School of Economics, Jinan University, Guangzhou, China
  • Chengzhao You College of Business and Economics, Australian National University, Canberra, Australia



Growth Accounting; Joint Production Decomposition; Energy Conservation and Pollution Reduction


We employ the joint production decomposition model to conduct a full decomposition of CO2 emission among 36 industrial sectors in China from 1998 to 2011, under the framework of growth accounting. The results show that: (1) the average CO2 emission increases at an annual rate of 3.01%, and production technology progression is the main driving force, while the transformation toward clean production effectively curb the rapid growth of CO2 emissions; (2) the effect of technology changes on CO2 emission is larger during the "10th Five-Year Plan" compared with the "11th Five-Year Plan", which makes the annual growth rate of CO2 emission during the "11th Five-Year Plan" 1% lower than its counterpart; This study has important theoretical and practical significance for understanding the driving factors of CO2 emission and the corresponding emission reduction measures.


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How to Cite

Liu, L., & You, C. (2023). The Driving Force of CO2 Reduction in China’s Industries. Financial Economics Letters, 1(1), 37–44.