China’s CO2 emissions embodied in fixed capital formation and its spatial distribution

This study aims to measure China’s CO2 emissions embodied in fixed capital formation (FCF) from 2007 to 2017 by using both a multi-regional input-output (MRIO) model and a single-region input-output model (SRIO). Then decoupling analysis was performed for uncovering the relationship between embodied CO2 emissions and added values at provincial level. Logarithmic Mean Divisia Index (LMDI) method was further conducted to identify driving factors underlying the growth of embodied CO2 emissions. Results show that CO2 emission from FCF doubled from 2436 million tons (Mt) in 2007 to 4820 Mt in 2012, and increased slightly to 5089 Mt in 2017. Electric power, gas, and water production and supply sector (EGW) and manufacturing industry (MFI) sector were two dominant emitters from supply-side perspective, while construction (CON) was the largest demanding sector driving the embodied emissions from upstream sectors. From geographical point of view, northern provinces were the major inter-regional net exporters of embodied CO2 emissions, while eastern and southern provinces were net importers of embodied CO2 emissions. Based on such results, policy recommendations are proposed considering the relation between supply and demand sector, inter-provincial CO2 emission transfer, and local economic development to mitigate CO2 emissions from China’s FCF.