The Influence Mechanism and Effect of Foreign Investment on China's Carbon Emissions

Under the background of China's increasing openness and global climate's abnormal change,this paper investigated the effect of FDI on China's Carbon dioxide emissions and the mechanisms of this effect. For this purpose,based on Copeland-Taylor's theoretical framework,this paper introduced technical factors which might lead to emissions,including FDI,R&D and the absorption capacity,and decomposed the effect of FDI on Carbon dioxide emissions into three effects: scale effect,structural effect and technical effect. It also used provincial panel data from 1995 to 2013 to estimate the effect of FDI on China's Carbon dioxide emissions. The main findings were as follows: Whether from the perspective of the whole sample or high emission regions,FDI increased China's Carbon dioxide emissions,but it was beneficial to the reduction of Carbon dioxide emissions in low emission regions. From the perspective of utilizing technical effect to achieve emission reduction,in terms of scale,quality and efficiency,China's FDI had potential. The empirical results showed that we should intensify environmental regulation in the central and western provinces to make full use of foreign capital's positive technology effect,while we should accelerate establishing long-term environmental governance mechanism on the basis of regional coordination,and boost the carbon emissions trading market.