THE CONTRIBUTION OF NATURAL CAPITAL ON CARBON TOTAL FACTOR PRODUCTIVITY IN CHINA

This study focuses on the contribution of natural capital to achieving carbon neutrality in China based on the provincial data from 1998 to 2019. This paper first measures the natural capital of each province by ecological footprint (EF), then explores the contribution of natural capital on carbon total factor productivity (CTFP) through a global non-radial Luenberger productivity indicator (GLPI), and decomposes the new CTFP into efficiency change (EC) and technical change (TC). We find that the contribution of natural capital to CTFP is relatively small, mainly due to the negative impact of infrastructure land and energy footprint and the decline of the marginal effect of natural capital and environmental carrying capacity. Second, technology innovation is still a main driver of promoting the CTFP of EF. Third, the contribution of natural capital to CTFP varies greatly with different types of natural capital and regions. We provide corresponding policy implications based on the main conclusions.