Impacts of inter-sectoral trade on carbon emissions—a case of China in 2007

Abstract

With the increase in international trade, more attention has been given to quantifying the impacts of international trade on energy use and carbon emissions. Input-output analysis is a suitable tool for assessing resources or pollutants embodied in trade and it has become a critical tool for performing such analysis. This study estimated the national and sectoral carbon emissions embodied in Chinese international trade using the latest available China input-output table of 2007. The results showed that a significant exporting behavior of embodied carbon emissions existed in China’s trade. Over 1/3 of the emissions in Chinese domestic production processes were generated for exports in 2007. The net balance of emissions embodied in exports and imports accounted for nearly 30% of China’s domestic emissions, which means that any policy made to increase the exports would result in a significant growth of China’s domestic emissions. Since over half of China’s export trade is processing trade, the re-exported emissions could not be overlooked; otherwise, it would hard to capture the actual emissions generated abroad to obtain China’s domestic consumption. The enlargement of export scale is a primary driven factor to the rapid growth of China’s exported emissions. It is necessary for China to adjust its economic and industrial structure to reduce the dependence of economic growth on the export trade. However, when adjusting industry structures or making policies on carbon emission reduction, it will be more reasonable to consider the relationship between production and consumption, rather than just focus on the emission values of sectors’ direct production, as a large part of carbon emissions emitted by the principal direct polluters were generated to obtain the products which were required by other sectors.