An Analysis of the Responsibilities and Driving Factors for Embodied Carbon in Trade

Abstract

By adopting the consumption-based accounting (CBA) method of carbon emissions based on national carbon intensity (NCI), using the International Trade Centre (ITC) database, the Emissions Database for Global Atmospheric Research (EDGAR), and the World Bank database, and taking 13 countries and regions including the European Union (EU) countries and the United States (US) as research samples, this paper conducts an accounting of the embodied carbon in trade between China and other major economies in the world, clarifies the responsibilities China has taken for foreign consumption-based carbon emissions, and analyzes the various driving factors of China’s embodied carbon in exports. The findings are as follows: (i) Most of the developed economies have higher consumption-based emissions than production-based emissions, which is contrary to most of the developing economies, with developing countries bearing responsibilities for 15–20% of the consumption-based carbon emissions for developed countries; (ii) the carbon emissions of countries and regions are closely related to the embodied carbon in trade, with a correlation coefficient of 0.96. (iii) China has taken responsibility for a large amount of carbon emissions from foreign consumer demand, most of which are from the US, the EU, ASEAN, and Japan, respectively accounting for 3.8%, 3.5%, 2.3%, and 1.2% of China’s production-based carbon emissions in 2019; (iv) technique effect is the main driving factor for China’s embodied carbon in trade, while the specific driving factors vary by industry. Based on the above analysis, it is suggested that China should: (i) consider the trade factor in its efforts to achieve carbon peaking and carbon neutrality; (ii) adopt differentiated measures to reduce trade-related emissions for specific industries; (iii) fully consider China’s demand for carbon peaking and carbon neutrality in international negotiations; (iv) give more support to the research on and measurement of consumption-based carbon emissions.