Recalculating CO2 emissions from the perspective of value-added trade: An input-output analysis of China's trade data

Abstract

Using traditional trade statistics to calculate CO2 emissions embodied in international trade results in significant miscalculations and a deeper divide between countries. The aim of this research is to provide a reasonable estimate of carbon emissions to help policymakers in each country address their actual share of responsibility. This study employs the World Input-Output Database and the gross export decomposition methodology to recount the CO2 emissions embodied in China's international trade from the perspective of value-added trade. The result shows that reliance on traditional statistics caused a significant overestimation of China's imports and exports: US$ 398.77 billion and US$ 504.46 billion for China's imports and exports, respectively. Our findings suggest that 177.24 million tons of carbon emissions embodied in imports and 907.636 million tons of carbon emission embodied in exports were over calculated. The result obtained with traditional calculation methods has artificially increased the responsibility share of China in the global emissions reduction. We also compare the CO2 emission coefficients of China with those of other countries. Our findings suggest that the high emission coefficients of most Chinese industrial sectors determine the carbon emissions embodied in China's exports to be higher than in its imports.