Analyses of CO₂ emissions embodied in Japan-China trade

This paper examines CO₂ emissions embodied in Japan-China trade. Besides directly quantifying the flow of CO₂ emissions between the two countries by using a traditional input-output (IO) model, this study also estimates the effect of bilateral trade to CO₂ emissions by scenario analysis. The time series of quantifications indicate that CO₂ emissions embodied in exported goods from Japan to China increased overall from 1990 to 2000. The exported CO₂ emissions from China to Japan greatly increased in the first half of the 1990s. However, by 2000, the amount of emissions had reduced from 1995 levels. Regardless, there was a net export of CO₂ emissions from China to Japan during 1990-2000. The scenario comparison shows that the bilateral trade has helped the reduction of CO₂ emissions. On average, the Chinese economy was confirmed to be much more carbon-intensive than Japan. The regression analysis shows a significant but not perfect correlation between the carbon intensities at the sector level of the two countries. In terms of CO₂ emission reduction opportunities, most sectors of Chinese industry could benefit from learning Japanese technologies that produce lower carbon intensities.