Why does education matter in climate action? Evidence and mechanisms from China’s higher education expansion in the late 1990s

Exploiting an exogenous shock from a centrally devised, nationwide higher education expansion in China in the late 1990s and followed by a surge in the college-educated labour in job markets in the early 2000s, we use a difference-in-differences strategy and carbon satellite datasets to empirically estimate the impact and mechanisms of increases in human capital investment on carbon emission intensity. We find that the regions with the most human-capital-dependent can experience a larger decline of carbon emission intensity compared with that of regions with the least after the policy entry into force. The college-educated labour with higher social responsibility flooded into the job markets contributes to the low-carbon transformation of economy, by improving the production efficiency and innovation, and in turn promoting the upgrading of industrial structure and decreasing the use of fossil energy. This climate mitigation effect is more profound for the regions that are economically developed but also lack the education resources of university and college.