Abstract
This paper uses an optimal interregional input-output model to focus on how interregional industrial shifts alone might enable China to reduce carbon intensity instead of national shifts. The optimal industry shifts assure integration of all regions by regional services and goods in which carbon emissions are embodied via energy consumption. Generally speaking, high-tech industries should concentrate in affluent regions to replace construction. Selected services should increase output shares across most of regions. Meanwhile, energy-intensive manufacturing, rather than agriculture, should decrease their shares to achieve the national annual growth constrained by nation’s carbon targets. Due to the need to decelerate energy use, carbon intensity goal puts particularly extreme pressure on less-developed regions to shutter heavy industries. Explicit shifts toward cleaner resources and renewable energy appear to be quite important for keeping coal mines in Central China working.