Decreasing China’s carbon intensity through research and development activities

Abstract Research and development (R&D) activities are frequently undertaken as a powerful means to improve a country’s environmental performance. However, previous studies examine R&D activities as a whole, and thus do not provide detailed information, such as the carbon intensity reduction of individual actors or stages. In addition, factors that affect regional capacity for absorbing technology (absorptive capacity) are important to influence the role of R&D in carbon intensity, but they have largely been ignored in the literature. In this study, we investigate the impacts of domestic R&D on carbon intensity by classifying R&D into three stages and three actors. The results derived from a Chinese provincial panel dataset from 2000 to 2016 indicate that domestic R&D is effective for improving carbon intensity. R&D at different stages and involving different actors have statistically different impacts on carbon intensity. Further analysis using the panel threshold model provides new evidence that the nexus between carbon intensity and domestic R&D is nonlinear. Technology absorptive capacity, which is denoted by the full-time equivalent of R&D personnel, can alleviate the negative role of R&D in increasing carbon intensity and strengthen the positive effect of R&D on decreasing carbon intensity. According to the empirical evidence, some insightful policy implications for China to decrease the carbon intensity are presented.