The persistent and transient total factor carbon emission performance and its economic determinants: evidence from China's province-level panel data

The total factor carbon emission performance has been largely used to investigate the effectiveness of climate policies and to support the design of carbon reduction strategies. Despite the important information that this indicator is providing in relation to historical and cross-country trends, no previous studies have been specifically devoted to analyze the persistent and the transient components of the total factor carbon emission performance. By disaggregating the time-variant and the time-invariant elements of the carbon dioxide emission changes, this paper adopts, for the first time, a new methodological approach to decompose the components of the total factor carbon emission performance indicator. Using panel data for selected 30 Chinese provinces for the time-period 1997–2017, this paper combines the environmental production technology, the Shephard distance function, and the stochastic frontier models to measure and investigate the spatio-temporal evolution of the total factor carbon emission performance and to evaluate the effectiveness of Chinese policies. By providing a better understanding of the total factor carbon dioxide emission performance, the proposed methodology is suitable to be replicated across regions, and provides an important opportunity for international comparisons and for the design of coordinated carbon reduction strategies.