Regional difference and drivers in China's carbon emissions embodied in internal trade

Abstract

To understand the impact of China's internal trade on China's carbon emissions, this article used the multi-regional input-output model to compare embodied carbon emissions based on production principle and consumption principle in the eight major economic regions of China. Besides, the SDA method was used to reveal the drivers of changes in CO2 emissions. The study uses data from the 2007 and 2012 multi-regional input-output tables. The result shows that domestic demand emissions are the primary source of production-based emissions in China, but the proportion of external demand emissions is increasing rapidly. According to the structural decomposition of the embodied carbon emissions, it can be seen that the carbon emissions caused by the trade in intermediate products have always been a major component of external demand emissions. Further research indicates that the rapid growth in carbon emissions from the production and consumption side of the region is mainly attributed to the expansion of the final demand scale and changes in input structure of the production department. The most critical factor that restrains the increase in carbon emissions on both principles in all regions is the reduction of emission intensity in the production sector. The conclusion of this paper has important implications for how to coordinate inter-provincial trade and regionally balanced development under open economic conditions.