Forest-based bioeconomy is a key pillar of Germany's bioeconomy strategies to reduce carbon emissions. Here we employ an extended spatial Durbin model and panel data (2000 to 2021) at the NUTS-3 level to examine the effect of the forest-based bioeconomy on carbon emission across Germany. Specifically, we analyze both intra-regional and spillover effects of technological innovation, bioeconomy scale, industrial upgrading, and their interactions from 2000 to 2021, covering all 401 counties and cities. The results reveal that technological innovation within the forest-based bioeconomy shows a gradual spatial diffusion, spreading from central counties or cities to surrounding areas. Locally, such innovation contributes to carbon reduction by driving industrial upgrading and generating employment opportunities in the bioeconomy. Additionally, it indirectly lowers carbon emissions in neighbouring regions through negative spillover effects associated with industrial upgrading and bioeconomy scale. These findings highlight the significant potential of the forest-based bioeconomy to enhance regional carbon performance. They underscore the importance of integrating technological innovation, labor market development, and industrial transition strategies to maximize decarbonization outcomes. • Significant potential of the forest-based bioeconomy to enhance regional carbon performance is found. • Intra-regional and spillover effects of technological innovation, bioeconomy scale, industrial upgrading are analyzed. • Technological innovation within the forest-based bioeconomy shows a gradual spatial diffusion. • Technological innovation reduces carbon emissions by upgrading industry and creating jobs.
Wen et al. (Mon,) studied this question.