State and Private Company Ownership Effect on CO2 Emissions: A Chinese Provincial Level Analysis

Abstract: China has experienced unprecedented economic success since the liberalisation process began in 1978. However, this expansion has also brought with it large scale environmental damage. Using data obtained from the Chinese National Buraeu of Statistics, this study investigates CO2 emissions from the years 2000 – 2012 on a provincial level in comparison with company state and private ownership structure, to understand which ownership form is a less CO2 intensive producer of goods and services. The study’s results from 29 Chinese provinces show that private firms are less CO2 polluting than state owned firms for equivalent economic activity, thus making an expansion of the private sector and reduction of the state owned sector a potential contributor towards China’s carbon mitigations. Additionally, the results show that as China moves away from primary industry as the majority source of income, towards high-tech and service sectors, the CO2 intensity is reduced. This has implications for Chinese policy formation, where the focus moves towards improving environmental sustainability whilst continuing to maintan strong annual economic growth.