The Green Transition Of China's Industrial Economy

China has experienced full development since the reform and opening up,which is inseparable from the outstanding contribution of the industrial sector.As the vital engine of the national economy,the added-value of China's industrial economy has been ranked first in the world.However,this proud performance comes at the expense of serious environmental pollution.China's total energy consumption and the net increase in energy consumption have accounted for 22.4% and 49%,respectively,of the world's total;meanwhile,the carbon dioxide emission has accounted for 27.1% of the global total emissions.Domestically,the industrial sector has been the primary contributor to economic growth.The energy consumption in the industrial sector has accounted for over 80% of the whole country's energy consumption,generating over 84% of the total carbon dioxide emission.Obviously,the extensive development mode has not only been reaching the limits of the ecological environment,but also further limiting the sustainable development of China's economy.Facing the increasingly severe domestic and international environmental pressure,the green transition of production in China's industrial economy is urgently called on.However,it requires the government to strengthen the environmental regulation as well as enrich the environmental regulation tools,which undoubtedly raises a challenge for China's industrial economic growth.Coordinating the competing interests of economic growth and environmental protection has become a profound topic with great theoretical and practical importance.Therefore,this dissertation chooses the green transition of China's industrial economy under environmental regulation as the major object of study,and constructs empirical research and the mechanism between the environmental regulation and the green transition of China's industrial economy on the basis of related research on the relationships among resources,the environment,and economic growth,thus offering references for sustainable economic growth in China.The key to achieve the green transition of production in China's industrial economy is to improve the quality contribution of green total factor production in industrial economic growth,therefore,this dissertation first of all includes the energy consumption and environmental pollution into the production accounting framework,and uses the non-radial,non-angular directional distance function(Slacks-Based Measurement,SBM)and global Malmquist-Luenberger(GML)productivity index to accurately measure the green total factor productivity of 36 sub-industries from 2001 to 2011.Furthermore,this dissertation uses the contribution of green total factor productivity in industrial economic growth as the main indicator of economic growth pattern and degree of green transition in the industrial sector.Considering the usage of resources,production processes,and environmental pollution vary among the sub-industries,this dissertation applies clustering and convergence analysis based on the degree of green transition in sub-industries,and divides them into the green intensive group,the intermediate transition group and the extensive group.Additionally,firms pursing maximized profits will not consciously internalize the environmental pollution during the production process due to the environment externality,thus government intervention is required for the green transition of China's industrial economy.Seeking a balance between China's industrial economy and environmental quality improvement is the second major goal of this dissertation.Combined with Environmental Kuznets Curve(EKC)Hypothesis and Porter Hypothesis,this dissertation studies the relationship between China's industrial economy and environmental pollution by adopting the panel threshold mode,and discovered the nonlinear relationship between the environmental regulation and green transition of China's industrial economy.The major conclusions of this dissertation are as follows:From the year 2001 to 2011,the green production technology efficiency of China's industrial economy has risen in a wavelike pattern by including the energy consumption and environmental pollution into the calculation.This is inseparable from the concept of sustainable development in China in recent years,however,the average annual rate of the green production technology efficiency is only 61%,and indicates an extensive development mode with high input,high consumption and high pollution.From the sub-industries' perspective,the green production technology efficiency indexes vary among sub-industries.Very few sub-industries' green production technology efficiency can achieve 99%,close to the production frontier,whereas,the coal mining and washing industry has the lowest efficiency of 32%.The green total factor productivity of China's industrial economy also exhibits a wavelike rising pattern as well during the sample study period with average annual growth rate of 5.7%.Looking at the decomposition items,the average growth rate of technological progress is 3.8%,except for the year of 2005;the overall growth rate of technical efficiency also maintains a positive value of 2.8%,except for a few years with negative growth rates.Thus,both technological progress and technical efficiency make a contribution to the green total factor productivity of China's industrial economy with 57% and 43%,respectively.The technological progress has gradually become the dominant force for China's industrial economy,switching from the extensive to intensive development mode,and the green total factor productivity as an important engine has been playing an increasingly important role in the green transition of China's industrial economy.Using the contribution of the green total factor productivity to the industrial economic growth as the main measure of China's industrial economic growth mode,the result shows that on average 31.4% of the industrial economic growth is from the green total factor productivity,indicating the extensive development mode of China's industrial economy has not been significantly improved.The contribution rate of green total factor productivity to industrial economic growth varies widely among the different sub-industries.Only a few high-tech sub-industries or clean sub-industries tend to achieve green production,and most of the sub-industries still largely depend on capital,labor and energy investment to promote economic growth.The green total factor productivity has not yet formed the main contribution of China's industrial economic growth.Based on the heterogeneity of development mode among sub-industries,this dissertation divides all the sub-industries into the green intensive group,the intermediate transition group and the extensive group through the clustering analysis.The contribution of the green total factor productivity to the industrial economic growth in the green intensive group is 53.9% and the average green total factor productivity itself is also high,reaching 7.2%;the contribution of the green total factor productivity to the industrial economic growth in the extensive group is 19.6%,and the green total factor productivity itself is low with 3.4%;and the average contribution of the green total factor productivity to the industrial economic growth in the intermediate transition group is 21.5% and the green total factor productivity varies widely among the sub-industries,and thus brings the uncertainty to the green transition of China's industrial economy.Based on the convergent analysis upon three groups,this dissertation discovers that the green contribution of three groups all reach the steady state over time and maintain a stable speed,but an absolute difference persists among the three groups.Therefore,it requires Chinese government to increase the technical and financial support to the green intensive group,making it as a major strength of the green transition of the industrial economy,and accelerates the elimination of outdated capacity to better distribute the limited resources.3.The conclusion of the empirical study on the relationship between China's industrial economy and environmental pollution varies widely by choosing different environmental pollution indicators,and EKC hypothesis is not generally accepted among all the environmental pollution indicators and all sub-industries.The empirical research that takes industrial wastewater as the main environmental pollution index shows that there is an inverted N-shaped curve between the environmental pollution and the industrial economic growth in all sub-industries group,the extensive group and the intermediate transition group,however,there is an N-shaped curve between the two in the green intensive group,that is,the EKC relationship with inverted-U shaped curve only exists in a certain stage of industrial economic growth in the four groups of study.In the empirical study which takes the industrial sulfur dioxide as the main environmental pollution index,it shows that only the all sub-industries group finds the N-shaped curve relationship between environmental pollution and industrial economic growth,and there is no significant econometric relationship between the two in the three groups.In the empirical study that takes solid waste as the main environmental pollution index,it discovers that there is no significant econometric relationship between the environmental pollution and the industrial economic growth in the green intensive group and the intermediate transition group,meanwhile,there is a negative correlation between the two in the all sub-industries group and the extensive group,indicating the environmental quality and industrial economic growth have entered a balanced stage in these two groups.Overall,according to the current development level of China's industrial economy,most of the sub-industries have not yet reached the turning point of environmental quality improvement,thus the environmental quality and China's industrial economic growth have fallen into a dilemma.Blindly accelerating industrial economic growth will only accelerate the deterioration of environmental quality.4.The empirical study between the environmental regulation and China's industrial economic growth has proved the existence of the Porter Hypothesis in China's industrial economy,but there is no single linear relationship between the environmental regulation and the green transition of China's industrial economy,rather,it is the threshold effect.The threshold value is 1.03,0.03 and 1.04 for the all sub-industries group,the green intensive group and the extensive group,respectively,and there are two threshold values as 0.51 and 0.92 in the intermediate transition group.The environmental regulation will have a different regulatory effect on China's industrial economic growth before and after the threshold values,and only if we reach the threshold value can we make better use of environmental regulation to promote the green transition of China's industrial economy.Therefore,the focus of China's environmental regulation should switch from the single means to the innovation of environmental regulation,encouragement and guidance to the enterprises increasing the green technology innovation and investment,andcontribution improvement of the green total factor productivity to industrial economic growth,thus accelerating the green transition of China's industrial economy.