Embodied Carbon In Trade:Evidence From China

Along with the deepening of globalization, international trade are being more and more influential in resource utilization and global climate change.With the policy of opening up, China has become the world’s largest trading nation in 2012. But at the same time, China’s scale of carbon dioxide emissions grows rapidly and brings serious environment problems. In 2009, China’s carbon dioxide emissions reached 7.687 billion tons of carbon equivalent, becoming the world’s largest emitter of carbon dioxide (World Bank). For this reason, China is facing huge pressure in international climate negotiations.In fact, through international trade, the exporters always undertake part of the importers’ carbon dioxide emissions. As the developing countries produce and export plenty of energy-intensive products to the developed ones, they as well discharge large scale CO2 embodied in international trade.This paper intends to calculate the CO2 embodied in international trade of China, and tries to find out the industrial distribution structure of embodied CO2. In this way, China can clarify its responsibility for the global carbon dioxide reduction and maintain its interests.The calculation of this paper is based on single-region input-output model, using the 1-0 table and related data during 1997-2010. Besides the results of China as a whole, this paper discusses the transfer of carbon emission in a provincial level, as well the individual situations between China and its major trading partners. In the end, the paper compares the differences among the BRICS in the CO2 embodied in international trade.The results are:the CO2 embodied in international trade of China grows substantially, especially after China joined the WTO. The manufacturing industry takes primary responsibility for the net CO2 emission embodied in international trade. The Bohai Gulf area is disadvantageous in inter-regional carbon transfer. The United States is the largest net export target of embodied CO2 while South Korea is the largest net import target. In the end, China has the highest carbon emission rate among the BRICS.According to the empirical results, industrial restructuring is the primary task for carbon reduction. At the same time, an appropriate import policy can help to balance the international payments and the carbon transfer. Furthermore, the government should pay attention to carbon transfer on provincial level, and encourage the development of new energy to reduce the carbon emission rate. In addition, it’s important to put forward a new principle to measure countries’ responsibility for carbon reduction in international negotiations.