Embodied carbon dioxide flow in international trade: A comparative analysis based on China and Japan

Abstract

Carbon dioxide embodied flow in international trade has become an important factor in defining global carbon emission responsibility and climate policy. We conducted an empirical analysis for China and Japan for the years 2000-2014, using a multi-region input-output model and considering the rest of the world as a comparison group. We compared the two countries' direct and complete carbon dioxide emissions intensity and bilateral economic activities such as imports and exports, production and consumption to analyze the difference between China and Japan. The results showed that the intensities of carbon emissions in all sectors of China were higher than that in Japan and that China's annual production-based emissions were greater than consumption-based emissions, the opposite of these relationships in Japan. China was a typical net carbon export country, and carbon embodied in its imports and exports continued to increase throughout the study period. In contrast, Japan's volume and growth rate of embodied carbon emissions were far less than China's and Japan was a typical net carbon import country. Finally, the conclusions of this study support recommendations for the formulation of international carbon emission responsibility allocation, domestic abatement policy as well as China's trade policy.

Keywords: Consumption-based emissions; Embodied carbon dioxide flow; Import and export; Multi-regional input-output model; Production-based emissions.