| ||||||||||||||||||||||||||||||||||||||||||||||||||||
This article appears in the following Oxford Review of Economic Policy issue: CLIMATE CHANGE [View the issue table of contents]
China's balance of emissions embodied in trade: approaches to measurement and allocating international responsibility
* Research Centre for Urban and Environmental Studies, Chinese Academy of Social Sciences, e-mail: jiahuapan{at}163.com
** School of Oriental and African Studies, University of London, e-mail: jonnyphillips{at}gmail.com
*** Research Centre for Sustainable Development, Chinese Academy of Social Sciences, e-mail: cycass{at}163bj.com
 |
Abstract |
|---|
International trade is characterized not only by the flow of capital and goods, but also by the energy and emissions embodied in goods during their production. This paper investigates the evolving role that Chinese trade is playing in the response to climate change by estimating the scale of emissions embodied in China's current trade pattern and demonstrating the magnitude of the difference between the emissions it produces (some of which are incurred to meet the consumption demands of the rest of the world) and the emissions embodied in the goods it consumes. Estimating China's emissions on a consumption rather than a production basis both lowers its responsibility for carbon-dioxide (CO2) emissions in 2006 from 5,500 to 3,840mtCO2 and reduces the growth rate of emissions from an average of 12.5 per cent p.a. to 8.7 per cent p.a. between 2001 and 2006. The analysis indicates that a reliable consumption-based accounting methodology is feasible and could improve our understanding of which actors and states are responsible for emissions. For example, recent emissions reductions by developed countries may lack credibility if production has merely been displaced to countries such as China. Moreover, in the current institutional context, production methodologies encourage leakages through trade that may do more to displace than to reduce emissions. Both equity and efficiency concerns therefore suggest that emissions embodied in trade should receive special attention in the distribution of post-Kyoto abatement burdens.
Key Words: balance of emissions embodied in trade (BEET) • China • consumption-based accounting • pollution haven effect • processing trade
This paper is based on a study on embodied energy with financial support from the World Wide Fund for Nature China Office and the Chinese Academy of Social Sciences. The authors would like to acknowledge with thanks the research assistance and discussion provided by Laihui Xie, Yan Zheng, and Olivia Macdonald. In the process of research, the authors benefited from comments from experts from the China Institute of International Trade, the Energy Bureau of the National Development and Reform Commission of China, and Research Centre on Environmental Policy of the Ministry of Environmental Protection, and from participants in workshops in Bali, Beijing, Washington DC, and Berlin. However, remaining errors are the sole responsibility of the authors.
1 Netherlands Environmental Assessment Agency (2007); see also IEA (2007).
2 The issue was first raised on 4 June 2007 by Ma Kai, Director of the National Development and Reform Commission, at a press conference on China's National Programme on Climate Change. It was reiterated at the Bali conference by his deputy, Xie Zhenhua, the head of the Chinese delegation to the 13th Conference of Parties to the United Nations Framework Convention on Climate Change (UN FCCC) Serving as the 3rd Meeting of the Parties to the Kyoto Protocol (COP13/MOP3).
3 Since an emissions deficit in one country is a surplus for another country, this cannot imply a reduction in global emissions, but does affect the distribution between countries.
4 I represents the identity matrix.
5 Note that M here includes all imports, whether for domestic consumption or the processing trade.
7 China Statistical Yearbook 2006 (NBS, various years). Note that there are nevertheless sectoral differences between our estimates and reported figures because we estimate intensity per unit of final demand while official statistics are based on unit of value added.
8 This conversion rate is based on CAIT (Climate Analysis Indicators Tool, an information and analysis tool on global climate change developed by the WRI, cait.wri.org). The conversion factor between toe and tce is approximately 1:1.43.
9 Hong Kong operates an independent trading system, but since April 2003 has been a party to the UN Framework Convention on Climate Change (FCCC) as a part of China.
10 We attribute this energy intensity to the full value of imported goods, assuming away any role for the processing trade in the country of origin. These linkages are hard to trace for single-country studies, but would emerge naturally from a comprehensive study that combined the input–output tables of all countries.
11 As noted earlier, there are many components to a consumption account, of which the emissions embodied in trade estimated here are only one. Others include transportation and tourism.
12 According to WRI CAIT, the emission factor in 2006 is 0.86tC/toe, larger than the figure of 0.83tC/toe in 2002. Using WRI emissions factor, total emission of CO2 from fossil-fuel combustion is estimated at 5,500 mt CO2, which is lower than the figure 6,200 mt given in the study by the Netherlands Environmental Assessment Agency (2007). Please note our figure does not include emission from industrial processes, such as cement production and methane.
13 If purchasing power parity (PPP) is used, the figures for China would be close to world averages. For example, in 2005 the world average was 0.209 kgoe/$US PPP and 0.219 kgoe/$US PPP.
15 Based on the Shanghai Securities Daily, 22 June 2007.
16 Of course, we are abstracting from transportation emissions which necessarily rise when production is relocated abroad.
17 The exercise is only a hypothetical one; in practice, had the USA produced these goods the structure of its economy would be altered and its energy intensity would be endogenous to the alternative pattern of trade and industrial structure.
18 However, the legality of border tariff adjustments remains unclear. See Deal (2008) for a summary.
19 IEA World Energy Outlook 2006, Summary, p.3.
20 Standard per capita emissions measures are undertaken on a production basis and so fail fully to reflect equality in emissions consumption that they usually aim to express. For example, with a population of 1.3 billion, our analysis suggests that Chinese consumption emissions per capita would be 3.5 t CO2 in 2006, compared to 4.8 t CO2 on a produced-emissions basis.
21 Lenzen (1998); Machado et al. (2001); IGES (2002); Straumann (2003); Mukhopadhyay (2004); Sánchez-Chóliz and Duarte (2004); Chung (2005); Mongelli et al. (2006); Nguyen and Keiichi (2006); Limmeechokchai and Suksuntornsiri (2007); and Mäenpää and Siikavirta (2007).
CiteULike 
Connotea 
Del.icio.us What's this?
This article has been cited by other articles:
|
|
 |
|
  D. Helm Climate-change policy: why has so little been achieved? Oxf. Rev. Econ. Policy, June 1, 2008; 24(2): 211 - 238. [Abstract] [Full Text] [PDF]
|
|