The Effects of China-EU Trade on CO₂ Emissions

Hui Zhou, Jie Cao, Jichuan Sheng

School of Economics and Management, Nanjing University of Information Science & Technology, Nanjing, China.

DOI: 10.4236/lce.2013.44A002                

Abstract

Production for international trade has played an important role in driving the rapid increase of Chinese CO₂ emissions. This paper uses input-output analysis to quantitatively estimate the effect of the bilateral trade between China and its present largest trading partner, the European Union (EU), on both national and global CO₂ emissions. The results show that under the bilateral trade, China’s emissions from 2002 to 2008 increased by 2458 MMT (6.64%), and the EU’s emissions decreased by 539 MMT (1.81%). From a global perspective, the trade led to an increase of 1919 MMT CO₂ in the world’s total emissions. The trading pattern is not dominated by pollution haven effect but by the comparative advantages in factor endowments. It is suggested that a consumer responsibility-based accounting system of national CO₂ inventory should be introduced in replace of the present producer responsibility-based one. In order to achieve cost efficiency in emissions reduction in the new accounting system, more CDM programs could be established.

Keywords

Carbon Dioxide Emissions; Trade between China and EU; Pollution Haven Hypothesis; Factor Endowments

Conflicts of Interest

The authors declare no conflicts of interest.

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