Quantifying the carbon advantages of capital: Evidence from China's multiregional input-output analysis

China's rapid economic growth is heavily investment-driven, with capital goods production accounting for about 40 % of the country's CO2 emissions. Allocating these emissions to their ultimate beneficiaries is key to determining carbon responsibility. This study employs multiregional input-output models with capital endogenization to more accurately allocate CO2 emissions from capital goods to final consumption, utilizing capital service data. It integrates cost-benefit analysis into the framework to assess carbon efficiency by calculating carbon advantages. Our findings underscore the significant influence of capital on China's economic growth and CO2 emissions from 2003 to 2020. The key findings include the following: (1) the rapid expansion of investment enhances capital services, but exhibits notable regional and sectoral disparities. (2) Capital input significantly influences the regional carbon footprint, particularly in the capital-intensive tertiary sectors, leading to increased CO2 emissions. (3) The carbon efficiency of capital in most provinces tends to decline as capital accumulates. However, increased investment in tertiary sectors and a more balanced capital-output ratio enhance relative economic and environmental efficiency in regional comparisons. To improve economic and environmental outcomes, policies should prioritize green investments in tertiary sectors, balance capital allocation across industries, and support resource-dependent regions in their transition to cleaner production development.