Carbon Dioxide Emissions and Forestry in China: A Spatial Panel Data Approach

This study examines the role of forest activities in carbon emissions for Chinese provinces. We use forest area and forest investment with two sub-proxies. The findings of spatial analysis have reported significant and positive coefficients for forest area. On the contrary, forest investment has a significant and negative relationship with carbon emission. These results negate the traditional belief and propose that an increase in forests through proper and continuous management activities is conducive to mitigating the carbon emissions. Additionally, the decomposition of spatial analysis in direct and indirect effects has confirmed the local indirect effect, and spillover effect, in neighboring regions. This concludes that the emission in one province has a significant spillover effect in the neighboring provinces. The findings provide several policy implications that are fruitful for environmental policy makers while drafting the rules and policies, such as introducing the forest management activities rather than increasing in forest areas without proper research and continuous management.