The effects of international trade on Chinese carbon...

J. Geogr. Sci. 2011, 21(2): 301-316 DOI: 10.1007/s11442-011-0846-5

© 2011 Science Press Springer-Verlag

Received: 2010-08-14 Accepted: 2010-09-21 Foundation: National Science & Technology Pillar Programme of China, No.2007BAC03A11 Author: Wei Benyong (1982−), Ph.D, specialized in climate change and natural disaster. E- mail: [email protected] *Corresponding author: Fang Xiuqi (1962−), Ph.D and Professor, specialized in climate change impacts and adaptation.

E-mail: [email protected]

www.geogsci.com springerlink.com/content/1009-637X

The effects of international trade on Chinese car-bon emissions: An empirical analysis

WEI Benyong1,2, *FANG Xiuqi2, WANG Yuan3 1. Institute of Geology, China Earthquake Administration, Beijing 100029, China; 2. School of Geography, Beijing Normal University, Beijing 100875, China; 3. School of Environment Science and Technology, Tianjin University, Tianjin 300072, China

Abstract: International trade is an important impact factor to the carbon emissions of a country. As the rapid development of Chinese foreign trade since its entry into the WTO in 2002, the effects of international trade on carbon emissions of China are more and more significant. Using the recent available input-output tables of China and energy consumption data, this study estimated the effects of Chinese foreign trade on carbon emissions and the changes of the effects by analyzing the emissions embodied in trade between 2002 and 2007. The re-sults showed a more and more significant exporting behavior of embodied carbon emissions in Chinese international trade. From 2002 to 2007, the proportion of net exported emissions and domestic exported emissions in domestic emissions increased from 18.32% to 29.79% and from 23.97% to 34.76%, respectively. In addition, about 22.10% and 32.29% of the total imported emissions were generated in processing trade in 2002 and 2007, respectively, which were imported and later exported emissions. Although, most of the sectors showed a growth trend in imported and exported emissions, sectors of electrical machinery and communication electronic equipment, chemical industry, and textile were still the biggest emission exporters, the net exported emissions of which were also the largest. For China and other developing countries, technology improvement may be the most favorable and acceptable ways to re-duce carbon emissions at present stage. In the future negotiations on emissions reduction, it would be more fair and reasonable to include the carbon emissions embodied in international trade when accounting the total emissions of an economy.

Keywords: input-output analysis; carbon emissions; international trade; China

1 Introduction

Global warming has been thought as an indisputable truth. The main reason for the warming of global climate system is attributed to the continuing increase of the atmospheric concen-

302 Journal of Geographical Sciences

trations of greenhouse gases as a result of human activities (IPCC, 2007). In order to avoid the possible negative impacts of global warming on human society, a series of measures have been taken to mitigate global warming by reducing the emissions of greenhouse gases in the world. However, around the ways of CO2 emission reduction and the allocation of fu-ture carbon emission rights, a game is playing among different interest groups.

As the development of globalization, the effects of international trade on the environment are more and more significant, including the potential impacts on geographically relocating carbon emissions. Many researchers have estimated the carbon emissions embodied in in-ternational trade for particular countries as well as for the world economy (Wyckoff and Roop, 1994; Schaeffer and Leal de Sá, 1996; Machado et al., 2001; Munksgaard and Peder-sen, 2001; Ahmad and Wyckoff, 2003; Sánchez-Chóliz and Duarte, 2004; Peters and Hertwich, 2006, 2008; Mäenpää et al., 2007; Ackerman et al., 2007). A general conclusion has been that the more open the economy is, the larger the impact of foreign trade has on a country’s carbon emissions. Moreover, all those studies have been pointing out that import and export trade could not be neglected for a relatively open economy; otherwise, energy and carbon emission figures might be badly distorted for this economy (Machado et al., 2001).

As one of the top countries of carbon emissions, China is facing with more and more pressure of emission reduction. However, China is also a large country of international trade. The rapid development of China’s economy has resulted in constant growth of foreign trade. From 1997 to 2002, the value of China’s total imports and exports grew at an average annual rate of 14.35%. Since the entry into the WTO, the average annual growth rate of China’s trade jumped up to 28.64% from 2002 to 2007. Compared to the export value of 2002, it increased by 2.7 times in 2007, reaching 1217.78 billion dollars. And the import value also jumped to 955.95 billion dollars in 2007, which was 2.2 times higher than the import value of 2002. On aggregate terms, the value of China’s trade surplus expanded from 30.43 billion dollars in 2002 to 261.83 billion dollars in 2007 (NBS, 2008). The rapid growth of Chinese foreign trade would have significant effects on carbon emissions in China.

However, quantitative evaluation of the impacts of Chinese international trade on energy use and carbon emissions has only recently begun. The estimation of IEA (2007) showed that the energy-related CO2 emissions embodied in China’s domestic production for exports accounted for 34% of the total emissions in 2004. If using weighted average carbon intensity of countries from which China imported goods, the estimate of China’s net exported em-bodied CO2 might be more than 17% of the total emissions in 2004 (Levine, 2008). Using single-region input-output model, Pan et al. (2008) estimated that China’s net export of em-bodied energy and embodied emissions accounted for about 16% of the primary energy consumption and about 19% of its production emissions in 2002, respectively; the net ex-ported emissions to the USA alone accounted for about 5% of China’s reported production emissions in 2002. Applying environmental input-output analysis, Weber et al. (2008) esti-mated the CO2 emissions emitted in the production of exports in China from 1987 to 2005 and found that in 2005, around one-third of the Chinese emissions were due to production of exports, and this proportion has risen from 12% in 1987 to 21% in 2002; the consumption in the developed world is driving this trend. The estimation of Wei et al. (2009a) also found that a significant exporting behavior of embodied emissions existed in the Chinese economy

WEI Benyong et al.: The effects of international trade on Chinese carbon emissions: An empirical analysis 303

in 2002; furthermore, over 20% of the total imported emissions were exported later (emis-sions in processing trade). In addition, using multi-region input-output model, Peters and Hertwich (2008) also found that the exported emissions represented 24.4% of the Chinese domestic emissions in 2001 and the percentage of imported emissions was only 6.6%. The similar research of Atkinson et al. (2009) also showed that China is a net exported country of carbon emissions in international trade. Recently, using an ecological input–output mod-eling based on the physical entry scheme, Chen and Chen (2010) estimated that the CO2 emissions and energy embodied in China’s exports represent 32.31% and 33.65% of the total emissions and total energy in 2007, respectively.

USA and European countries were the main importers of carbon emissions exported from China. Using Economic Input Output-Life Cycle Assessment software, Shui and Harriss (2006) found that during 1997–2003 about 7%–14% of China’s CO2 emissions were the re-sults of producing goods for exports to the USA; CO2 emissions of USA would have in-creased from 3%–6% if the goods imported from China had been produced in the USA. Ap-plying the similar method, Li and Hewitt (2008) estimated CO2 emissions embodied in bi-lateral trade between the UK and China and found that about 4% of China’s CO2 emissions in 2004 were as a result of producing goods for the UK market; the UK reduced its CO2 emissions by approximately 11% through trade with China in 2004. The estimation of Weber et al. (2008) also found that large portions of recent Chinese export emissions went to the developed world, with approximately 27% to the USA, 19% to the EU27, and 14% to the remaining Annex B countries, mainly Japan, Australia, and New Zealand. Recently, Xu et al. (2009) studied the environmental impacts, particularly energy consumption and air emis-sions, embodied in the eastbound (from China to the USA) trade from 2002 to 2007, using an environmental input-output analysis and the adjusted bilateral trade data. They found that embodied energy and embodied CO2 accounted for about 12%–17% of China’s energy con-sumption and about 8%–12% of China’s CO2 emissions, respectively. The study of Zhang (2009) also got the similar results.

Although there were already some meaningful studies on carbon emissions embodied in Chinese international trade, further related researches would be necessary as the rapid de-velopment of Chinese foreign trade, especially as the development of processing trade. Ac-cording to statistics (NBS, 2008), the exporting share of processing trade has been over 50% of the total exports since 1996 and the share reached up to 55.26% and 50.71% in 2002 and 2007, respectively. It will be necessary to distinguish the effects of processing trade and general trade on carbon emissions of China.

Because the input–output tables are estimated only every 5 years in China, we chose the recent Chinese input-output table of 2002 (entry into the WTO) and 2007 (the latest issue) to estimate the effects of Chinese international trade on carbon emissions and the changes of the effects from the view of the final demands in this paper. Moreover, we distinguished the domestic and imported inputs in production processes and evaluated the effects of process-ing trade (emissions imported and later exported), which would be benefit for us to further understand the situations of emissions embodied in international trade. In this study, we try to answer three questions: 1) As a large country of foreign trade, what was the amount of the net emissions generated in China for foreign regions due to the import and export trade? 2) How did the effects of international trade on carbon emissions change from 2002 to 2007 in


China? 3) Which sectors were the key emission sectors in Chinese import and export trade and how their roles changed from 2002 to 2007?

2 Methodology and data sources

2.1 Input-output analysis

Input-output analysis (IOA) was introduced by Leontief in the 1930s. It is a suitable tool for assessing resource or pollutant embodiments in goods and services on a macroeconomic scale and allows us to trace the total carbon emissions from the view of final demand, in-cluding the direct and indirect emissions attributed to the production of each industry (Len-zen, 1998; Machado et al., 2001; Lenzen et al., 2004; Peters and Hertwich, 2006; Mongelli et al., 2006).

In order to estimate the actual effects of Chinese international trade on national and global emissions accurately, multi-region input-output model was better for this analysis. Unfortu-nately, a limitation of multi-region IOA approach is data availability. To overcome this data difficulty, in this study, we only use Chinese input-output table and choose the carbon inten-sity of unit GDP (based on market exchange rate1) to reflect the differences of carbon inten-sity of imports from different countries or regions. Then, we calculate the ratios of carbon intensity of unit GDP between exporters (export to China) and China, and then weighted by the share of the respective exporting countries or regions over the total Chinese imports to obtain an average ratio. We then multiply the carbon intensities of Chinese industries by the average ratio to obtain the relevant carbon intensities of imports.

The matrix A of production technology reflecting the inter-industry requirements is the core of an IOA model. For an open economy, A can be separated into two components Ad and Am, which represents the intermediate use of domestically produced products and the inter-mediate use of imported products, respectively. Considering the intermediate use flow and the purpose of final demand, the total output of an economy (X) can be expressed as: X = (I – Ad) −1(yd + yz) (1) where yd represents domestic consumption (includes final consumption and capital forma-tion) on the economy; yz represents the exports, and (yd + yz) is the final demand of the economy.

Given the direct carbon intensity in each domestic industrial sector, S= {Fj /Xj}, where Fj is the domestic direct carbon emissions generated by sector j, the domestic emissions em-bodied in the final demand (C) can be expressed as: C = SX = S(I – Ad)−1(yd + yz) = Rdyd + Rdyz (2) where Rd = S(I – Ad)−1 represents the direct and indirect emissions generated in China to ob-tain a unit of final demand; Rdyd is the emissions embodied in domestic consumption; Rdyz is the domestic emissions (Cz) embodied in exports.

However, industries also require imported inputs to produce goods and services for the final demand, which is AmX. And the final consumers may also need imports (ym) from the

1 The reason that we didn’t use a purchasing power parity (PPP) adjustment is that PPP measures capture differences

in the prices of non-tradable inputs, which need not be directly related to differences in energy used to produce a par-ticular dollar value of exports (Pan et al., 2008). When evaluating the total energy use or carbon emissions, it is not nec-essary to adjust the energy/carbon intensity using PPP method.


rest of the world. If Rm represents the average direct and indirect carbon emissions generated abroad to obtain a unit of final demand, the emissions embodied in Chinese total imports can be obtained using the following expression:

Ctm = Rm(AmX + ym) = RmAm(I – Ad)−1(yd + yz) + Rmym = RmAm(I – Ad)−1yd + RmAm(I – Ad)−1yz + Rmym (3) where RmAm(I – Ad)−1yd is the emissions embodiment in the imported inputs to obtain China’s domestic consumption and RmAm(I – Ad)−1yz is the emissions imported and later ex-ported, which is caused by processing trade; Rmym is the emissions generated abroad to pro-duce the imported goods and services for China’s domestic consumption requirements.

Given the imported and later exported emissions, the total exported emissions can be ex-pressed as: Ctz = Rdyz + RmAm(I – Ad)−1yz (4)

Similarly, subtracting imported and later exported emissions from total imported emis-sions, we can calculate the actual imported carbon emissions to satisfy the requirements of China’s domestic consumption: Cm = RmAm(I – Ad)−1yd + Rmym (5)

Therefore, the balance of carbon emissions embodied in Chinese international trade can be expressed as: Cb =Cz – Cm = Rdyz – RmAm(I – Ad)−1yd – Rmym (6)

If the value of balance is positive, it will indicate that the carbon emissions transferred into China from exterior by exporting goods and services are more than the one transferred outside the economy by importing, being net exported emissions; on the contrary, if the value is negative, the truth will be opposite, being net imported emissions; and if the value is equal to zero, it will be net balance.

2.2 Data sources and data preparation

Input-output tables and energy statistics are two basic sets of data for the input-output model discussed above. Input–output tables are estimated only every 5 years in China. In this study, the latest Chinese Input-Output Tables of 2002 and 2007 (monetary unit) released respec-tively in 2006 and 2009 (NBSNAD, 2006, 2009), and the energy consumptions of 2002 and 2007 from China Statistical Yearbook 2008 (NBS, 2004, 2008) are used. Chinese ex-port/import trade data are also from IO tables whose trade data of goods were obtained from custom statistics directly and trade data on services were calculated based on the balance of international payment and other data.

Because the industrial classification systems used in the IO tables and in the energy bal-ance of the country are not the same, we adjust both the systems to be compatible before analyzing them further. Finally, the adjusted Chinese IO tables display 27×27 industries; the energy balance is also adjusted to the relevant 27 industries. Then, we add up the consump-tion of fossil fuels and calculate the total production emissions for each adjusted industries, respectively. In this study, the conversion factors of solid, liquid and gas fuels are 25.54, 19.90 and 15.15 kgC/GJ, respectively (RTCCCC, 2000). We need to note that at present the certainties of the conversion factors of energy have not yet reached a consensus in China, which would influence the specific calculation results of carbon emissions, although it would not affect the share of each component in total emissions obviously.


According to China Statistical Yearbook 2004 and 2008 (NBS, 2004, 2008), the top five exporters to China in 2002 and 2007 were the same, being Japan, China Taiwan, South Ko-rea, US and Germany, accounting for 18.11%, 12.89%, 9.67%, 8.98% and 5.92% of China’s total imports in 2002 and 14.01%, 10.57%, 10.85%, 7.26% and 4.75% of China’s total im-ports in 2007, respectively. Goods from these countries or regions accounted for 55.57% of the total imports in 2002 and 47.44% of the total imports in 2007, respectively. Because of this dominance and the requirement to reduce the data complexity, this analysis focuses mainly on the largest five exporters to China. For these countries or regions, individual car-bon intensity of unit GDP (based on market exchange rate) is used (EIA, 2009). For other exporters to China, we use the world average carbon intensity of unit GDP. Then, using the “weighted average method” mentioned above, we calculate the average ratio of carbon in-tensity of unit GDP between exporters and China to estimate the average carbon intensity of imports. A shortcoming of using carbon intensity of unit GDP to reflect the differences of carbon intensities of imports is that it may underestimate the emissions embodied in im-ported manufactured goods produced in the countries or regions with larger proportion of tertiary industry and smaller proportion of secondary industry, resulting from ignoring the impacts of differences of industrial structures among countries on industrial carbon intensity.

In addition, because there is only a column vector reporting total imports by industries in the original IO table of China, we have to construct an import use matrix for the original table by pro-rating the import column across intermediate use and final use (except exports), applying the structure implied by the total use matrix (Wei et al., 2009b). The resulting im-port matrix is then subtracted from the total use matrix to obtain the domestic use matrix.

3 Results

3.1 Total embodiment carbon emissions

Figure 1 shows the domestic and imported embodiment carbon emissions in China. In ag-gregate terms, the total emissions (domestic and abroad) embodied in China’s final demand were 1194.89 MtC and 2217.92 MtC in 2002 and 2007, respectively. The total emissions increased by 1023.03 MtC from 2002 to 2007, with an annual average growth of 204.61 MtC. In 2007, about 93.16% of the total emissions are generated in the domestic production processes (2066.30 MtC) and the other 6.83% of the total emissions are generated abroad (151.61 MtC), which basically kept the same with the shares of domestic emissions (93.23%) and imported emissions (6.77%) in 2002. However, if we look at the absolute emission val-ues, we can find that from 2002 to 2007, both the domestic emissions and total imported emissions increased obviously, increasing by 952.28 MtC and 70.75 MtC, respectively. The annual average growth rate of domestic emissions and total imported emissions reached up to 17.10% and 17.50%, respectively. Compared with the share of domestic carbon emissions, the proportion of the total imported emissions was relative small (less than 7% in 2002 and 2007), which indicates that the total carbon emissions embodied in China’s final demand were mainly generated in domestic production processes. Furthermore, more than 80% (81.30% in 2002 and 84.86% in 2007) of the total imported emissions were generated to obtain the imported inputs; the other parts (18.70% in 2002 and 15.14% in 2007) of the total imported emissions were embodied in consumption goods and services.


Figure 1 Domestic and imported embodiment carbon emissions

Figure 2 Carbon emissions generated for domestic consumption and exports

Looking at the purposes of generating carbon emissions (Figure 2), we can find that more than 60% of the total emissions were generated to satisfy domestic consumption requirement. The emissions generated for domestic consumption increased from 909.94 MtC of 2002 to 1450.65 MtC of 2007, but its percentage accounting for total emissions showed a decreasing trend, from 76.15% of 2002 to 65.41% of 2007. The carbon emissions (within and outside China) generated for the production of Chinese exports increased from 284.94 MtC to 767.26 MtC and its proportion over the total emissions also increased from 23.85% in 2002 to 34.60% in 2007. Moreover, about 94% (93.73% in 2002 and 93.62% in 2007) of the total exported emissions were generated in domestic production processes and the others were imported and later exported emissions (caused by processing trade).

Given the imported and later exported emissions, we can find that about 32.29% (48.96 MtC) of the total imported emissions were imported and later exported emissions in 2007, and the share was 22.10% (17.87 MtC) in 2002. The effects of processing trade on carbon emissions were also more and more significant.

3.2 The effects of foreign trade on Chinese carbon emissions

If the emissions imported and later exported were not considered (Figure 3), from 2002 to 2007, the domestic exported emissions increased from 267.07 MtC to 718.31 MtC, increas-ing by over 160%. Accordingly, the share of domestic exported emissions in the domestic


Figure 3 Carbon emissions embodied in import and export trade

emissions also increased from 23.97% up to 34.76%, which showed a very significant growth trend. If subtracting the imported and later exported emissions from the total im-ported emissions, the actual imported emissions to obtain China’s domestic consumption were only 62.99 MtC and 102.65 MtC in 2002 and 2007, respectively. They accounted for 5.65% and 4.97% of domestic emissions in 2002 and 2007, respectively, which was a rela-tive small share compared with that of domestic exported emissions. Consequently, if we look at the net trade balance, we can find that Chinese carbon emission exports were much more than its carbon imports, and the difference between exported and imported emissions showed significant growth, from 204.08 MtC of 2002 up to 615.65 MtC of 2007, increasing by over 200%. The share of net exported in domestic emissions also increased from 18.32% to 29.79%, which showed a more and more significant exporting behavior in the Chinese economy. Given the more and more significant shares of the domestic exported emissions and net exported emissions, any policy with increasing Chinese exports by domestic produc-tion would cause a notable increase in its domestic emissions.

3.3 Sectoral changes of embodiment emissions

Table 1 shows the sectoral embodiment emission changes from 2002 to 2007. It could be found that most sectors showed a growth trend in each component. If looking at the im-ported emissions, we can observe that only 5 sectors’ total imported emissions decreased in 2007, compared with that of 2002. They are the sectors of production and distribution of electric power and heat power (–3.23 MtC), textile (–1.06 MtC), production and distribution of water (–0.47 MtC), metal products (–0.45 MtC) and production and distribution of gas (–0.09 MtC), the actual imported emissions of which also decreased by 2.58 MtC, 0.83 MtC, 0.40 MtC, 0.53 MtC and 0.08 MtC, respectively. In these sectors, the largest decreasing am-plitudes happened in production and distribution of water, production and distribution of gas, production and distribution of electric power and heat power, in which the total imported emissions fell by 100%, 100% and 94.44% and actual imported emissions decreased by 100%, 100% and 95.20%, respectively. This indicates that the imported emissions of these sectors in 2007 were much less than the emissions imported in 2002, even being zero. In other sectors, we can find the highest increase values of imported emissions in electrical machinery and communication electronic equipment, chemical industry, mining and

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processing of metal ores, which increased by 16.71 MtC, 11.83 MtC, 9.64 MtC of the total imported emissions and 8.69 MtC, 6.12 MtC, 5.41 MtC of the actual imported emissions in 2007, respectively. However, if we look at the increasing amplitude, we can observe that except for retail and restaurant (the imported emissions was zero in 2002), the largest in-creasing amplitudes happened in sectors of other manufacturing, mining and processing of metal ores, mining and washing of coal, which increased by 1056.25%, 730.30%, 471.43% of the total imported emissions and 892.31%, 557.73%, 381.82% of the actual imported emissions in 2007, compared with their imported emissions in 2002, respectively.

If looking at the exported emissions (Table 1), we can find that the largest increases in exported emissions were from sectors of electrical machinery and communication electronic equipment, smelting and pressing of metals, chemical industry. The total exported emissions of these sectors increased by 133.63 MtC, 75.66 MtC, and 55.97 MtC in 2007, respectively. And their domestic exported emissions also increased by 125.61 MtC, 71.80 MtC, and 50.26 MtC in 2007, respectively. However, if we look at the increasing amplitude of exported emissions, we can find that sectors of mining and processing of metal ores (810.00%), smelting and pressing of metals (573.18%) had the largest increasing amplitudes of the total exported emissions from 2002 to 2007; the sectors, production and distribution of electric power and heat power (892.59%), smelting and pressing of metals (661.75%) had the high-est increasing amplitudes of domestic exported emissions. By contrast, the sectors with the most significant decreasing amplitudes of exported emissions were production and distribu-tion of water, production and distribution of gas, which had no exported emissions in 2007, indicating that their emissions generated in domestic production process were all used to satisfy domestic consumption in 2007.

Looking at the balance between exported and imported emissions (Table 1), we can ob-serve that the largest increases in net exported emissions were electrical machinery and communication electronic equipment, smelting and pressing of metals, chemical industry, and textile, which increased by 116.92 MtC, 68.43 MtC, 44.14 MtC and 32.61 MtC in 2007, respectively. In contrast, agriculture (–0.79 MtC), mining and processing of non-mental ores (–0.31 MtC) and production and distribution of gas (–1.51 MtC) were the only 3 sectors with net exported emissions decreasing. Additionally, there were 4 sectors with imported emissions overtaking exported emissions in 2002, which were production and distribution of electric power and heat power (net imported emissions 2.44 MtC), extraction of petroleum and natural gas (net imported emissions 1.80 MtC), mining and processing of metal ores (net imported emissions 0.72 MtC) and production and distribution of water (net imported emis-sions 0.38 MtC), respectively. To 2007, the amounts of net imported emissions of mining and processing of metal ores and extraction of petroleum and natural gas increased by 4.78 MtC and 4.35 MtC, respectively. On the contrary, the exported emissions of production and distribution of electric power and heat power were more than the imported emissions in 2007, which contrasted with the situation of 2002.

Based on the above analysis, we can find that on the whole, the volume of sectoral em-bodied carbon emissions had changed obviously from 2002 to 2007. However, if we focus on the sectoral percentages of each component associated with the economy as a whole (Ta-ble 2), we can observe that although the influences of sectoral emissions on the whole econ-

Tabl

e 2

The

sec

tora

l per

cent

ages

of e

ach

com

pone

nt (%

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l im

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porte

d an

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ter e

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ted

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l exp

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dem

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on

Dom

estic

exp

orte

dem

issi

on

Net

bal

ance

Com

pone

nts

Se

ctor

s 20

0220

0720

02

2007

20

02

2007

20

0220

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02

2007

20

0220

07

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icul

ture

1.

05

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21

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80

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82

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700.

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g an

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l 0.

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98

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300.

55Ex

tract

ion

of p

etro

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and

nat

ural

gas

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53

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29

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g an

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550.

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ile

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79

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Text

ile w

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eral

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uctio

n an

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strib

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oduc

tion

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ribut

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of w

ater

0.

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stru

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n 0.

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ther

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95


omy also changed from 2002 to 2007, the main sectors which had the largest percentages of imported or exported emissions in 2007 were the same with those in 2002. Looking at the imported emissions, we can find the imported emissions (total or actual imports) from sec-tors of electrical machinery and communication electronic equipment, chemical industry, smelting and pressing of metals were the largest in 2002, accounting for 17.46%, 17.66%, 12.48% of the total imported emissions and 16.47%, 16.54%, 12.29% of the total actual im-ported emissions, respectively. So were they in 2007, accounting for 20.33%, 17.22%, 11.42% of the total imported emissions and 18.57%, 16.11%, 10.82% of the total actual im-ported emissions, respectively.

Looking at exported emissions (Table 2), we can find that whether in 2002 or 2007, the percentages of electrical machinery and communication electronic equipment, chemical in-dustry, and textile were all the highest in exported emissions (total or domestic exports or net exports). For example, the shares of these sectors represented in total domestic exported emissions were 18.95%, 12.27%, 7.35% in 2002 and 24.53%, 11.56%, 7.16% in 2007, re-spectively, which were the highest percentages of exported emissions in China.

It is certain that there were some sectors, the emission influences of which on the whole economy obviously changed (Table 2). For example, sector of mining and processing of metal ores only accounted for 1.64% of the total imported emissions in 2002, but the share increased to 7.23% in 2007; sector of smelting and pressing of metals only represented 4.06% of the total domestic exported emissions of China in 2002, but the proportion in-creased to 11.51% in 2007; on the contrary, sector of production and distribution of electric power and heat power accounted for 4.30% of the total actual imported emissions of China in 2002, but the share decreased to 0.12% in 2007.

4 Discussion

4.1 Uncertainties in the carbon emission calculations

There are some uncertainties in calculating the emissions embodied in Chinese trade. One is that, the input–output analysis itself has many inherent uncertainties (more discussions in Lenzen, 2001). Based on the Chinese single-region input-output table, it may allow us to get a relatively accurate assessment of the emissions embodied in Chinese exports, but when estimating the emissions in goods and services exported to China, the errors may be more significant (Lenzen, 2001; Lenzen et al., 2004). Another important uncertainty is from the method of calculating the carbon intensity factors of imports from different regions, which may underestimate the emissions embodied in imported manufactured goods produced in the countries with larger proportion of tertiary industry and smaller proportion of secondary in-dustry. Additionally, to obtain the import use matrix from the original IO table, the method of pro-rating the import column would also inevitably lead to certain errors.

At present, for the reason of data availability, we are not able to fully quantify the preci-sion of our calculation results, but preliminary estimates show that the outcome from the study using the more accurate data will not substantially alter the conclusions obtained in this analysis. These limitations would be improved through the use of multi-region IO table and more accurate industry carbon intensities of foreign regions, and the detailed analysis of inter-sector production process in the future.


4.2 Understanding of the impacts of international trade on Chinese carbon emissions

From 2002 to 2007, the extent of the effects of foreign trade on Chinese carbon emissions had expanded sharply. It might be largely related to two factors. The first is the coal-based energy consumption structure and the secondary industry-based production structure which would keep the domestic energy intensity higher. In 2002, the consumption of coal ac-counted for 66.3% of the total energy consumption. And 44.8% of gross domestic product of China was attributed to secondary industry in 2002 (NBS, 2008). In 2007, the relevant shares rose up to 69.5% and 48.6%, respectively, which would result in the carbon emissions embodied in unit exports being more than that embodied in unit imports. The second factor, which might be the more important factor, is the rapid growth of export trade. From 2002 to 2007, China’s exports increased by 246.80%, while the imports increased by 199.97% (NBS, 2008). The growth rate of exports was faster than that of imports, which might result in the sharp increase of the amounts of net exported emissions. Using input-output structural de-composition analysis, Liu et al. (2010) also found that the expanding total volume of exports and increasing exports of energy-intensive goods tend to enlarge the energy embodied in exports from 1992 to 2005, but the improvement of energy efficiency and changes in pri-mary energy consumption structure can offset some effects of the above driving forces on energy embodiment in exports.

Although, the coal-based energy consumption structure and the secondary industry-based production structure have more important roles in the increase of carbon emissions, it may be hard for China to adjust the structure characteristics in a short time because of its en-dowment characteristics and its present economic development stage. In addition, the growth of Chinese foreign trade, including the expansion of its trade surplus, is mainly the result of maximizing the relative advantage in the market economic system. The develop-ment of Chinese economy not only provides the rest countries of the world lots of goods and services that they need through China’s exports, but also reduces the relative cost of produc-tion in developed countries. Chinese foreign trade has been playing an important role in the economic development of the world, due to its huge market, stable government system and abundant cheap labor. Consequently, it is thought that at the present stage, the better way for China to reduce the impacts of international trade on national or global carbon emissions should be to improve its production technologies and reduce the energy consumption inten-sity on the whole, not to only control the amounts of Chinese foreign trade. Furthermore, the countries which imported goods from China should take parts of responsibility for Chinese carbon emissions, because much carbon emissions of China were generated for the con-sumption demands of foreign consumers, especially for the consumers of the developed countries.

4.3 Policy implications of global emissions reduction

As we all know, global emissions reduction need the global action. The policies of global carbon emissions reduction should ensure different groups’ interests and consider the effects of international trade on carbon emissions. The traditional accounting method of carbon emissions of an economy based on “production accounting principle’’ only considers the domestic production emissions, not including the emissions transferred into the rest of the


world by imports trade, which would not capture the actual energy and environmental fig-ures of the economy, because it is possible for a country to reduce its overall reported emis-sions by simply increasing relevant imports instead of certain domestic production (en-ergy/carbon-intensive goods, most probably). Many studies showed that the developing countries have generated much carbon emissions for developed countries by exporting goods and services to satisfy their consumption requirements (Schaeffer and Leal de Sá, 1996; Machado et al., 2001; Lenzen et al., 2007; Peters and Hertwich, 2008; Atkinson et al., 2009). On the market of international trade, the developing countries were in a disadvanta-geous position from the view of environmental gains. Therefore, one possible consequence of using “production accounting principle’’ to account carbon emissions of one country (as is currently the case), is that the effectiveness of climate change agreements might be influ-enced.

Given the future negotiations on carbon emissions reduction strategies, it might be neces-sary to call for a more reliable methodology for assessing greenhouse gases embodied in international trade, especially for countries with significant net exported emissions (such as the case of China). It would be more fair and reasonable to include the carbon emissions embodied in imports when accounting the total emissions of an economy. Moreover, when choosing a base year level for making the targets of carbon emissions reduction, it is not quite reasonable to choose the year in which the foreign trade balance had a significant in-fluence on national emissions (Munksgaard and Pedersen, 2001).

5 Conclusions

Despite the some uncertainties in this study, most parts resulting from the details of data, we can conclude that the international trade had significant effects on Chinese carbon emissions, and the effects changed as the time went. Compared to the emissions of 2002, the domestic exported emissions of 2007 increased from 267.07 MtC to 718.31 MtC, increasing by over 160%; the net exported emissions increased correspondingly from 204.08 MtC up to 615.65 MtC, increasing by over 200%. The share of domestic exported emissions in the domestic emissions jumped from 23.97% of 2002 up to 34.76% of 2007; the proportion of net ex-ported emissions over domestic emissions also increased from 18.32% of 2002 up to 29.79% of 2007. The results showed that a more and more significant net exporting behavior of em-bodied carbon emissions exists in Chinese economy and the effects of processing trade on carbon emissions were also more and more significant.

Whether imported emissions or exported emissions, most sectors showed a growth trend in 2007, compared with the emissions of 2002. Although the influences of sectoral emissions on the whole economy also changed from 2002 to 2007, the main sectors which had the largest percentages of imported or exported emissions of China stayed the same. The largest imported emissions (total or actual imports) were from sectors of electrical machinery and communication electronic equipment, chemical industry, smelting and pressing of metals. The sectors of electrical machinery and communication electronic equipment, chemical in-dustry, and textile were the biggest emission exporters, the net exported emissions of which were also the largest.

Technology improvement may be the most favorable and acceptable way for China and


other developing countries to reduce their carbon emissions. Considering the historical re-sponsibility for the most of global carbon emissions and the current responsibility for more recent emissions growth in the developing world, the developed countries also should take more efforts to help the developing countries to reduce carbon emissions from the economic growth through technical assistance and financial support. In the future negotiations on car-bon emissions reduction, it would be more fair and reasonable to include the carbon emis-sions embodied in international trade when accounting the total emissions of an economy.

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