Research On The Impact Of Foreign Direct Investment In China’s Carbon Emissions

Since the reform and opening up, China has seen rapid economic development, which has caused the rapid growth of emissions of carbon dioxide. In 2008, China replaced the USA as the world’s biggest greenhouse gas emitter. According to the latest data released by IEA in 2011, the weight of carbon dioxide emissions in China is about 79.26 tons, accounting for 25.40% of the global emissions. Compared to the weight of 43.37 tons in the year of 2001, it has increased by 82.75%, if we let it continue, the pressure of carbon emission reduction will be increasing dramatically. Besides, China has introduced a lot of foreign direct investment to promote economic development. However, its negative impact on our country became visible gradually. Therefore, based on the carbon emissions pressures facing our country, we must re-examine the impact of foreign direct investment and think about how to use the foreign capital rationally in order to coordinate the development of our economy with environment.Considering the carbon dioxide emissions in China mainly centralizes in several carbon emissions provinces, this paper will take these provinces as the object, making comparative study of FDI and carbon emissions among these provinces. First of all, on the basis of domestic and foreign scholars, the paper will introduce the mechanism of foreign direct investment to carbon emissions from three aspects:the scale effect, structure effect and technical effect. Secondly, the paper makes quantitative analysis of carbon emissions and foreign direct investment of the main provinces. Thirdly, combining the scale effect, structure effect and technical effect of Grossman and Krueger, the author builds the econometrics model, and makes a detailed analysis on the effect of FDI effects to carbon emissions from the angle of heavy industry and high technology industry respectively. The empirical results show that, the scale effects of FDI to carbon emissions in the major provinces are all negative, and the scale effect in Guangdong Province is the most significant; the technical effect of FDI to carbon emissions is negative, but the coefficients are very small, shows that the technical effect is not obvious, and the technical effect in Jiangsu province is the most significant; Structure effects will vary with different industry, when we use the proportion of high technology industry which FDI are invested to indicate the structure effect of FDI,its effect to carbon dioxide is negative, but only the economy developed provinces have already begun to make conscious industrial structure adjustment, and put more investment to the high technology industry and achieved certain results, high technology industry in other provinces has no significant effect to reduce carbon emissions. When we use the proportion of heavy industry which FDI are invested to indicate structure effect of FDI,its effect on carbon emissions is generally positive, showing that the FDI of these provinces are mostly invested to the lower technology, higher pollution and higher energy consuming industries, which makes the emissions of carbon dioxide becoming worse. Finally, this article will put forward countermeasures and concrete suggestions to our country from the scale effect, structure effect and technical effect.