Double dividend of carbon intensity: environmental-quality improvement and sustainable economic growth

This paper established an equilibrium model including representative household, government, and eight industries, and two different environmental policy tools such as carbon intensity and carbon cap were added into the model. The paper points out that the carbon intensity policy imposed on major high-emission industries achieved double dividend of environmental-quality improvement and sustainable economic growth under the condition of proper constraint target. This result supports the environmental Porter hypothesis. This paper finds out that the double dividend is due to the fact that environmental governance policy leads to the rising price of resources and demand of labors, resulting in an effective redistribution of production factors among industries and sustainable economic growth. Furthermore, this paper estimates the marginal effect of economic structure on carbon emission and carbon intensity and provides targeted suggestions.