Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science
Abstract
The outbreak of the coronavirus (COVID-19) may exert profound impacts on China's economic development and carbon emissions via structural changes. Due to a lack of data, previous studies have focused on quantifying the changes in carbon emissions but have failed to identify structural changes in the determinants of carbon emissions. Here, we use the latest input‒output table of China's economy and apply structural decomposition analysis to understand the dynamic changes in the determinants of carbon emissions from 2002 to 2020, specifically the impact of COVID-19 on carbon emissions. We find that the contribution of production structure to carbon emission growth was enlarged due to the pandemic, after a continuous decline since 2007. Lower production efficiency and reliance on carbon intensive inputs indicated the deterioration in production structure. The contribution of per capita consumption to emission growth was decreased because of the economic contraction in the first half of 2020. For policy implications, efforts should be undertaken to increase investment in low-carbon industries and increase the proportion of consumption in GDP to shift the investment-led growth to consumption-led growth for an inclusive and green recovery from the pandemic
