How does green transformation of industrial sector affect carbon emissions? Evidence from China

Abstract Industry is the core sector with the most challenging task of carbon emission reduction in China. This paper explores how industrial transformation in China’s industrial sector affects carbon emissions. We shed light on the effect of industrial sector transformation on carbon emissions, and divide industrial sector transformation into two aspects: industrial structure optimization and industrial spatial layout.We construct socioeconomic panel data for 30 cities in the urban agglomeration in the middle reaches of the Yangtze River from 2000 to 2020, and explore the influence of industrial transformation on carbon emissions in 33 industrial sectors in China from three dimensions: spatial spillover effect, spatiotemporal heterogeneity, and threshold effect. The results show that: (1) In the industrial structure optimization dimension, industrial rationalization has effect on decreasing carbon emissions, while industrial upgrading increases carbon emissions. In the industrial spatial layout dimension, industrial specialization agglomeration can decline carbon emissions, while industrial diversification agglomeration does not reduce carbon emissions but instead increase carbon emissions.(2)Both industrial structure optimization and industrial spatial layout have spatiotemporal heterogeneous impacts on carbon emissions during the study period.(3) Under different levels of economic development, industrial transformation will have different impacts on carbon emissions. In the future, the Chinese government should increase efforts to promote technological progress and innovation, taking technological progress and independent innovation capabilities as the central link in promoting industrial transformation. Those findings not only provide certain environmental research reference for China’s industrial economic development and transformation, but also provide a practical reference for carbon reduction in other developing countries that are undergoing economic transformation.