Foreign Direct Investment's Influence On Carbon Emissions In China And Interational Comparison

While China has become the world's second biggest economy with its rapid economic development, it also becomes the world's biggest emitters of carbon dioxide. The purpose of this study is to propose some relevant advice on the usage of foreign investment that will help China develop by way of low-carbon economy with energy conservation and emissions deduction, based on empirical analysis of the effect of foreign investment on the carbon dioxide emissions,By mainly using the time series and panel data, this thesis studies the effect of foreign direct investment on the carbon dioxide emissions of China and the world as a whole by means of cointegration analysis, Granger Causality test and dynamic panel GMM estimator method. Meanwhile, it also makes a empirical analysis of the effect of the investment abroad of China and other countries on the domestic carbon dioxide emissions. Then a comparative research is made on the results gained from the two.This thesis finally concludes that on the whole, foreign direct investment of China and some other countries in the world has a significant effect on the carbon dioxide emissions. In China in particular, the effect is more obvious than that in other countries. As for other countries, the effect of their foreign investment abroad on the domestic carbon dioxide emission is so small that the increase of their foreign investment abroad only reduces the domestic dioxide carbon emission to a small degree. From the perspective of the industries that uses foreign direct investment, they mainly include the manufacturing industries, consumer goods, construction industry and some others with high consumption of energies. Therefore, in an overall sense, as for those industries, their carbon dioxide emissions often rank in the top few places. Besides, economic scale also has a significant effect on the carbon dioxide emissions, so much so that the effect is even bigger than that of foreign direct investment. Similarly, the effect of the economic scale in China on the carbon dioxide emissions is much bigger than that in other countries. This illustrates that the Chinese economic growth is made at the cost of more carbon dioxide emissions. As for the energy efficiency, similar to the effect of economic scale, it is not only bigger than that of foreign direct investment, but also bigger than that of the energy efficiency of other countries in the world. This makes it clear that higher energy efficiency yet lower ratio of actual energy utilization requires larger energy consumption of per unit of GDP larger and produces more carbon dioxide emissions. As for the energy structure of China, the raw coal has a more significant effect on the carbon dioxide emissions than the crude oil and natural gas. The consumption of the crude oil will reduce the carbon dioxide emissions. Therefore, the reduction of the raw coal consumption and increase of the crude oil consumption will effectively reduce carbon dioxide emissions. According to the practice in other countries in the world, all the three energies have a positive effect on the carbon dioxide emissions.