Research On The Relationship Between FDI And CO₂ Emissions In China

China has overtaken the United States as the world's biggest producer of carbon dioxide (CO2), accounting for about 21.8% of global CO2 production in 2008 compared to 7.7% in 1978. China now faces a high pressure on reducing CO2 emission home and abroad, but the increasing of emissions in china is not only related to the development model of China's economy and energy using, but also the international transferring factors triggered by FDI and trade. But very few literatures have focused on the relationship between FDI and CO2 emissions.On the application of industrial transfer and FDI environmental effects theories, this paper has a study on the relationship between FDI and CO2 in China through scale, composition and technical aspects. This paper finds that FDI has the remarkable positive impact on the CO2 emissions using panel data empirical test of 28 provinces. The FDI elasticity coefficient of CO2 emissions is 0.087, indicating that if FDI increases by 1%, CO2 emissions per capita would increase by around 0.09%. From the regional perspective, the FDI elasticity from east to west is reduced, the regional characteristics of FDI and the CO2 emissions shows gradient trend. Further, this paper finds that FDI has long-term negative impulse impact on the carbon intensity of energy structure and the intensity of energy consumption using VAR impulse response test. But FDI is not the Granger causality of the changing of two intensities. It shows that FDI doesn't have a significant positive impact on the energy-saving through composition effect and technical effect.In the light of the fact that FDI has a comprehensive negative effect on China's CO2 emissions for the negative scale effect is stronger then the positive composition and technical ones, this paper proposes some relevant measures depending on the study of FDI redress mechanism.