Analyzing The Impact Of FDI On Carbon Emissions Of Zhejiang Province

Along with the aggravation of greenhouse effect and the continuous increase of degree ofChina’s opening, the influence of foreign direct investment to the host countries’ carbon emissionshas aroused attention increasingly. In Zhejiang province—one of the five provinces who attractforeign investment most in our country, foreign direct investment drives the economic growthstrongly, at the same time, the problems of Excessive energy consumption and surge carbonemissions is exposed day by day.Through the theoretical analysis, we summarize the influencing factors of carbon emissions asscale factors, structural factors, and technical factors. And, scale factors include GDP, population;scale factors include industrial structure and energy structure; technical factors include energyefficiency or energy intensity. And foreign direct investment affects carbon emissions by affectingGDP, industrial structure, and energy efficiency, which correspond to scale effect, structure effectand technical effect of environmental effect of foreign direct investment respectively.Based on the theoretical analysis, we proceed with the empirical analysis which is divided intofive parts. Firstly, with carbon emissions of Zhejiang province as dependent variable and with GDPof Zhejiang province, industrial structure and energy efficiency as independent variable, weestablish a multiple linear regression model. The result indicates that GDP and industrial structurehave positive impact on carbon emissions and energy efficiency has negative impact on carbonemissions. Then we make co-integration test about foreign direct investment and carbon emissionsof Zhejiang province with Engle—Granger two-stage method to test the correlation between them.The result indicates that there exists long-run equilibrium relationship between foreign directinvestment of Zhejiang province and carbon emissions of Zhejiang province. The last three parts ofempirical analysis is about scale effect, structure effect and technical effect of foreign directinvestment influencing carbon emissions of Zhejiang province respectively. The result indicatesthat scale effect and structure effect that foreign direct investment of Zhejiang province influencingcarbon emissions is positive and the technical effect is negative, but the structure effect is weak.According to the result of the empirical analysis, the paper finally puts forward the followingpolicy suggestions: first, optimize the industrial structure of introduction of FDI and bring into playthe structure effect of emission reduction; second, strengthen the international cooperation oflow-carbon technology and introduction of CDM items；third, enhance the government functionsand perfect the relevant institutional system; fourth, set up experimental city of low carbon.