Co₂ emissions embodied in china–u.S. trade

After the Kyoto Protocol was implemented, carbon leakage exerts great influences on international trade and economy. Trade creates a mechanism for consumers to shift environmental pollution associated with their consumption to other countries. China has overtaken the U.S. as the world’s biggest CO₂ emitter since 2006. As China’s second largest trade partner, the U.S. has the biggest trade deficit with China which has aroused a lot of disputes between the two parties. But so far the assessments of the trade imbalance of China–U.S. have paid little attention to environmental impacts associated with the trade imbalance. Applied an input–output approach, the article estimates the amount of CO₂ embodied in China–U.S. trade during 1997–2007. It was found that through trade with China, the U.S. reduced its CO₂ emissions compared with a non-trade scenario. Due to the greater carbon-intensity and relatively less efficient production processes of Chinese industry, China–U.S. trade resulted in more CO₂ emissions in China and the world. In the end, the article gives some suggestions: It is equal and sustainable that the international accounting methodologies should be improved, for CO₂ emissions responsibility must be designed to account for the dynamic nature of international trade.