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 effect on pollutant heavy industries from the nodal regions into the periphery. We provide further evidence for this hypothesis by testing the effect on the respective regions’ structural composition. A placebo exercise supports causality of our benchmark findings.