Multinational enterprises (MNEs) can offer new pathways for sustainable development and climate action.
Multinational enterprises can help bridge China’s carbon inequality gap
Multinational enterprises (MNEs) can play a pivotal role in reducing regional carbon inequality across China - offering new pathways for sustainable development and climate action, a new study reveals.
While MNEs initially worsened regional carbon inequality - concentrating economic benefits in coastal regions while burdening inland provinces with emissions - this trend reversed after 2012.
Publishing their findings in Nature Communications, the international group of researchers note that, by 2017, MNEs had become a force for good - helping to reduce carbon inequality through strategic relocation to inland regions and increased investment in clean technology sectors.
The study is the first comprehensive analysis of how MNEs have influenced China’s regional carbon emissions and economic disparities over two decades. It calls for enhanced foreign investment in inland provinces, stronger environmental regulations, and mechanisms to ease technology transfer from MNEs to local firms.
China’s experience offers a blueprint for other developing nations grappling with similar challenges. Harnessing the power of global enterprises can align economic development with climate justice.
Dr Kailan Tian, the first author of the study, commented: “This shift marks a turning point which shows that with the right policies and incentives, MNEs can be leveraged not only for economic growth but also for environmental equity.
“The implications for Chinese society are profound. As China pursues its dual goals of carbon neutrality and balanced regional development, MNEs emerge as critical partners.
Dr Yuli Shan, from, the University of Birmingham, commented: “China’s experience offers a blueprint for other developing nations grappling with similar challenges. Harnessing the power of global enterprises can align economic development with climate justice.”
Researchers tracked the evolution of MNEs’ contributions to value-added and carbon emissions across China’s provinces from 1997 to 2017 - introducing the Carbon Gini Coefficient (C-Gini) to quantify inequality in emissions relative to economic gains.
Between 1997 and 2012, China’s C-Gini rose from 0.22 to 0.28, indicating growing disparity. However, by 2017, the presence of MNEs helped reduce the hypothetical C-Gini from 0.34 to 0.32, highlighting their potential to mitigate inequality.
Further analysis showed that, if domestic enterprises in inland China adopted the emission efficiencies of MNEs, national carbon emissions could drop by up to 2.79 billion tonnes, and the C-Gini could fall by 37.5%.
These findings underscore the importance of technology spillovers from MNEs and the need for targeted policy support to accelerate this convergence.
The research supports China’s commitment to the United Nations Sustainable Development Goals, particularly SDG 10 (Reduced Inequalities) and SDG 13 (Climate Action), and provides actionable insights for policymakers, investors, and sustainability advocates worldwide.
For more information, please contact the Press Office at the University of Birmingham on or +44 (0)121 414 2772.
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‘Leveraging multinational enterprises to reduce the escalating regional carbon inequality in China’ - Kailan Tian, Yu Zhang, Jing Meng, Zhuoying Zhang, Yuli Shan, Heran Zheng, Xiaowei Nie, and Cuihong Yang is published in Nature Communications.
Participating institutions: University of Birmingham, UK; Chinese Academy of Sciences, Beijing; University of Chinese Academy of Sciences, Beijing; Nanjing University, China; University College London, UK; National Tibetan Plateau Data Center; Institute of Tibetan Plateau Research; Tibet University, Lhasa, China.
Professor in Sustainability
Professor Shanis an expert in Climate Change and Sustainable Transitions. His research aims to reveal how human activities affect global and regional climate change.
