The Contribution of China's Outward Foreign Direct Investment (OFDI) to the Reduction of Global CO2 Emissions

Under economic globalization, with the intensification of China's reform and opening up, China's outward foreign direct investment (OFDI) has continuously gained momentum, but CO2 emissions caused by the OFDI have not been given due attention. As one China is of the world's leading CO2 emitters, it is necessary to conduct thorough research into the CO2 emission problem caused by China's OFDI. Thirty-four host countries were selected as the objects of this study, including some European countries, Australia, India, Indonesia, Brazil, Canada, Japan, Korea, Mexico, Russia, and the USA. Their CO2 emissions as caused by China's OFDI were calculated using the input-output model with non-competitive imports, the data of China's OFDI flows, and their own energy consumption and CO2 emissions from 2000 to 2011. Then a comparative analysis was performed taking China as the comparative object. CO2 emission transfer of China's OFDI was studied quantitatively. Finally, CO2 emissions from China's OFDI were discussed from the perspective of industry selection and location selection. The results showed that China's OFDI could achieve the aim of reducing global carbon emissions with reasonable industry and location selection.