China's domestic industry redistribution facilitates carbon emissions mitigation.

ABSTRACT

Industry redistribution is a common economic phenomenon that involves a dynamic configuration of the production location across a region, country, or the world. However, measurements of the associated pollutant emission effects have not been well conducted at the domestically regional level. Here, we calculate the CO2 emission changes induced by China's domestic inter-provincial industry redistribution during 2002-2017 using a counterfactual approach in the multi-regional input-output framework. We find that China's domestic industry redistribution decreased CO2 emissions during 2002-2017 and has considerable potential to continuously mitigate CO2 emissions in the future. We emphasize that the pollution haven effect may accompany the process of industry redistribution but can be weakened by effective policies, including stringent access thresholds in the regions undertaking industry relocation and regional industry structural upgrading. This paper provides policy recommendations for strengthening regional coordination to achieve China's transformation to carbon neutrality.