Transport infrastructure and the spatial distribution of CO2 emissions

This study presents an analysis of transport infrastructure projects and their effect on greenhouse gas emissions. Causal inter-regional spillover effects are estimated for the launch of the China Europe Railway Express using a spatial difference in differences estimator. The preferred Spatial Durbin Model reveals a small negative direct effect of approximately -3.5 percent and a more substantial positive indirect effect of around 12.7 percent. These results suggest a crowding out of pollutant heavy industries from the nodal regions into the periphery. We provide further evidence for this hypothesis by testing the impact on the respective regions’ structural composition. A number of robustness checks support causality of benchmark findings.