China's foreign trade and climate change: A case study of CO2 emissions

The globalization of trade has numerous environmental implications. Trade creates a mechanism for consumers to shift environmental pollution associated with their consumption to other countries. Carbon leakage exerts great influences on international trade and economy. Applying an input-output approach, the paper estimates the amount of carbon dioxide (CO2) embodied in China's foreign trade during 1997-2007. It is found that 10.03-26.54% of China's annual CO2 emissions are produced during the manufacture of export goods destined for foreign consumers, while the CO2 emissions embodied in China's imports accounted for only 4.40% (1997) and 9.05% (2007) of that. We also estimate that the rest of world avoided emitting 150.18Â Mt CO2 in 1997, increasing to 593Â Mt in 2007, as a result of importing goods from China, rather than manufacturing the same type and quantity of goods domestically. During 1997-2007, the net "additional" global CO2 emissions resulting from China's exports were 4894Â Mt. Then, the paper divides the trade-embodied emissions into scale, composition and technical effect. It was found that scale and composition effect increased the CO2 emissions embodied in trade while the technical effect offset a small part of them. Finally, its mechanism and policy implications are presented.

[1]  C. N. Hewitt,et al.  The effect of trade between China and the UK on national and global carbon dioxide emissions , 2008 .

[2]  Peter D. Blair,et al.  Input-Output Analysis , 2009 .

[3]  Bo Zhang,et al.  Methane emissions by Chinese economy: Inventory and embodiment analysis , 2010 .

[4]  C. Weber,et al.  China's growing CO2 emissions--a race between increasing consumption and efficiency gains. , 2007, Environmental science & technology.

[5]  Jim Watson,et al.  Who Owns China's Carbon Emissions? , 2007 .

[6]  Graciela Chichilnisky.  North-South Trade and the Global Environment , 1994 .

[7]  E. Hertwich,et al.  CO2 embodied in international trade with implications for global climate policy. , 2008, Environmental science & technology.

[8]  Glen P. Peters,et al.  The contribution of Chinese exports to climate change , 2008 .

[9]  H Scott Matthews,et al.  Embodied environmental emissions in U.S. international trade, 1997-2004. , 2007, Environmental science & technology.

[10]  Glen P. Peters,et al.  Construction of Chinese Energy and Emissions Inventory , 2006 .

[11]  Bart Los,et al.  Structural decomposition techniques : sense and sensitivity , 1998 .

[12]  Norihisa Sakurai,et al.  The Measurement of CO2 Embodiments in International Trade: Evidence from the Harmonised Input-Output and Bilateral Trade Database , 2009 .

[13]  Brian R. Copeland,et al.  Trade and Transboundary Pollution , 1995 .

[14]  M. S. Taylor,et al.  North-South Trade and the Environment , 1994 .

[15]  Bin Shui,et al.  The role of CO2 embodiment in US-China trade , 2006 .

[16]  T. Kiji,et al.  An input-output analysis on Japan-China environmental problem (1) : compilation of the input-output table for the analysis of energy and air pollutants , 1995 .

[17]  R. Feenstra,et al.  The Us-China Bilateral Trade Balance: its Size and Determinants , 1998 .

[18]  R. Schaeffer,et al.  Energy and carbon embodied in the international trade of Brazil: an input–output approach , 2001 .

[19]  Edgar G. Hertwich,et al.  Pollution embodied in trade: The Norwegian case , 2006 .

[20]  Joseph M. Roop,et al.  The embodiment of carbon in imports of manufactured products: Implications for international agreements on greenhouse gas emissions , 1994 .

[21]  Giuseppe Tassielli,et al.  Global warming agreements, international trade and energy/carbon embodiments: an input–output approach to the Italian case , 2006 .

[22]  Astrid Kander,et al.  Foreign trade and declining pollution in Sweden: a decomposition analysis of long-term structural and technological effects , 2006 .