The Relationship Between Fixed-Asset Investment and Carbon Emissions by Three Strata of Industry in China

Investment is an important driving force of economic growth, and fixed-asset investment is an important part of investment. Since the reform and opening up, a large amount of fixed-asset investment in China has been used to build infrastructure to promote economic growth, which has led to a continuous increase in the demand for fossil energy, resulting in an increase in carbon emissions. Based on VAR model, this paper uses Johansen cointegration test and Granger causality test to analyze the relationship between fixed-asset investment and carbon emissions in China from 1991 to 2017. The results show that: the long-run equilibrium relationships exist in primary, secondary, and tertiary industries between fixed-asset investment and their respective carbon emissions. In addition, there are bidirectional causalities in secondary and tertiary industries between fixed-asset investment and their respective carbon emissions, whereas there exists a unidirectional causality in primary industry from fixed-asset investment to carbon emissions.