Understanding the Impact of Land Resource Misallocation on Carbon Emissions in China

In order to achieve growth in fiscal revenue and the regional economy under the Chinese decentralization system, the land resources misallocation (LRM) among different industries was promoted through the differentiated land supply strategy, which has a vital role in carbon emissions. This study theoretically analyzes the overall effect and the effect of the intermediate LRM mechanism on carbon emissions and empirically tests the impact of LRM on carbon emissions based on panel data collected from 30 provinces in China from 2005 to 2017 using the environmental Kuznets curve theory. The results show that (1) the local governments have monopolized the primary land market across the nation, leading to resource misallocation among industrial, commercial, and residential land. This inefficient and unsustainable allocation aggravated the release of carbon emissions. (2) The impact of LRM on carbon emissions has varied among different regions. LRM in the eastern and central regions significantly exacerbated carbon emissions. A greater impact on carbon emissions occurred in the eastern region, while the impact was insignificant in the western region. (3) There are two mechanisms through which LRM affects carbon emissions. One is the restraint of upgrading industrial structure, and the other is the restriction of technological innovations. In conclusion, speeding up the reform of the tax sharing system is suggested to reduce the excessive dependence of local governments on land resources. Meanwhile, in order to reduce carbon emissions, the land acquisition and transfer system should be reformed to gradually achieve the market-oriented allocation of land resources, and the benefits coordination mechanism of different land transfer modes should be established. Finally, we propose different carbon emission reduction policies for the heterogeneity of regional economic development.