More than half of China’s CO2 emissions are from micro, small and medium-sized enterprises
2018
Meng, Bo | Liu, Yu | Andrew, Robbie | Zhou, Meifang | Hubacek, Klaus | Xue, Jinjun | Peters, Glen | Gao, Yuning
To date, the burden of CO₂ emissions reductions has been largely confined to large enterprises in China. Using new data with firm ownership and size information included, we show that micro, small and medium-sized enterprises (MSMEs) produced 53% of China’s CO₂ emissions in 2010. Detailed supply-chain analysis reveals that final demand for products made downstream by domestic-private MSMEs, along with exports made downstream by foreign-owned MSMEs, are the main drivers of China’s CO₂ emissions. Most of these emissions occur upstream in the electricity and heat sector, which is mainly controlled by large, state-owned enterprises with the highest carbon intensity, and the non-metallic mineral sector, which consists of a very large number of domestic-private MSMEs with lower levels of enforcement of emissions regulations. Overall, MSMEs induced 65% of China’s CO₂ emissions through their supply chains. Our conclusion is that understanding the role of firm size for China is important in developing emissions reduction policies: given the very high per-enterprise overhead of emissions trading systems, and the abundance of MSMEs, our results clearly favour taxation.
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