Dynamics between energy intensity and carbon emissions: What does the clustering effect of labor and capital play?

Energy depletion and environmental degradation have emerged as pressing concerns in the era of China's high-quality green economic development. We present an integrated framework that incorporate energy consumption intensity, industrial clustering, and carbon emissions into the STIRPAT framework. Our study examines 30 Chinese provinces from 2006 to 2017. Unlike previous analyses, our study measures industrial clustering from two dimensions: labor and capital clustering. Specifically, the benchmark results confirm that a 1% increase in energy consumption intensity will, on average, raise regional carbon emission intensity by 0.03389%. Moderating analysis shows that labor and capital clustering significantly lower carbon emission intensity by reducing energy consumption. These findings have been consolidated after performing a panel vector autoregressive model. Interestingly, the promoting effect of energy consumption intensity on carbon emission intensity tends to be tightened when labor clustering surpasses a threshold. In contrast, the corresponding effects substantially weaken after capital clustering exceeds a threshold. In all, these findings provide new evidence to understand the energy-emission nexus from an industrial clustering perspective.