Trade and Environmental Responsibility for Greenhouse Gas Emissions: The Case of South Korea

Abstract

A significant amount of embodied greenhouse gas (GHG) emissions have been and are currently being traded in the globalized economy. The conventional territorial approach to the control of GHGs released within a country fails to account for a large portion of GHGs for which a country may take responsibility, particularly from the perspective of consumption. Given the large volume of products traded among nations, a series of studies have underscored the need for the global monitoring of GHG emissions not only generated from production but also driven by consumptive activities. This study develops time-series GHG emission inventories from 1995 to 2009 from both production- and consumption-based perspectives in the case of South Korea and analyzes the factors that influence the increase and the decrease of GHG emissions. This empirical analysis has determined that production-based activities are more responsible for GHG emissions in South Korea than consumption-based activities. The analysis also found that the trade surplus of embodied GHG emissions in South Korea ranged from 0.31 to 1.01 tons per capita. A decomposition analysis showed that developments in environmental technology play a significant role in the reduction of GHG emissions, associated with a 45 % gross change in GHG emissions. However, this reduction was offset by increases in demand and changes in the input structure to energy-intensive sectors. The change of input structure is a critical factor contributing to trend in increasing embodied GHG emissions in not only South Korea but also nations linked with global trade.