Abstract
This study investigated the driving factors of embodied carbon emission changes in manufacturing trades through structural decomposition analysis. For empirical analysis, we developed an environmental multiregional input–output model for Korea, Japan, and China for 1995–2009. The three countries, which are economically and environmentally significant in Asia, are not only tightly linked economically through global value chains, but also close geographically, sharing various environmental issues. The results show that China is a net exporter of embodied carbon emissions to Japan and Korea, despite a substantial trade deficit. Its exports are more carbon-intensive than its imports from Japan and Korea. China’s embodied emissions were mainly affected by a change in carbon-intensive production and trade structure, and Japan’s and Korea’s were affected by China’s final demand. At the sectoral level, “Electrical and Optical Equipment”, “Basic Metals and Fabricated Metal”, and “Textiles and Textile Products” mainly affected the embodied carbon emission changes in these three countries. As a result, a considerable share of carbon-intensive production has shifted to China and increased consumption of China’s final products and services in the manufacturing industries, resulting in a significant increase in embodied carbon emissions. Additionally, our findings at the sectoral level could provide important evidence regarding the effective environmental policies that enable sustainable industries. With the increasing interest in the embodied carbon emissions, future research would pay more attention to the bilateral trades of major carbon-emitting countries and multilateral trades.
Highlights
Over the last two decades, the volume of international trade has increased greatly due to globalization and trade liberalization as initiated by the World Trade Organization (WTO)
CO2 emissions embodied in manufacturing trade are quantified using the Multiregional Input–Output (MRIO) model
The total CO2 emissions embodied in the exports from China to Japan were 94 Mt in 1995, which decreased to 81 Mt in 2000 and increased to 144 Mt in 2009
Summary
Over the last two decades, the volume of international trade has increased greatly due to globalization and trade liberalization as initiated by the World Trade Organization (WTO). Due to the expansion of vertical specialization of production, the interdependence of the global economy has greatly increased, and much of the goods and services consumed by producers and consumers in one country are imported rather than produced domestically This expansion of trade exerts adverse environmental impacts by, for example, transferring the source of environmental pollution from domestic to overseas areas. Because of the different economic interests of developed and developing countries, the possibility of carbon leakage is expected to be high in the new climate system Such carbon leakage reduces the effectiveness of international mitigation policies, and has a negative impact on industrial competitiveness and raises the issue of inequity in emission responsibility between developed and developing countries. It is necessary to consider the global supply chain and carbon emission in terms of consumption when designing an optimal global environmental policy for GHG reduction
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