CO₂ Emissions Embodied in China's Foreign Trade: An Investigation from the Perspective of Global Vertical Specialization

In light of the growth in vertically specialized in global trade, the present paper uses input- output tables from the World Input-Output Database to construct an environmental multi-regional input-output model to calculate the CO₂ emissions embodied in China's international trade during 1995-2009. The advantage of this model lies in its incorporation of the re-exported CO₂ emissions component embodied in trade and its ability to differentiate domesticsourced CO₂ emissions from foreign-sourced CO₂ emissions in trade. The results show that carbon emissions embodied in both China's exports and imports increased significantly during 1995-2009. One important reason for this is that the re-exported carbon emissions embodied in China's imported intermediate inputs increased substantially during this period. Our research reveals that accelerating the transformation of trade pattern and upgrading processing trade should be emphasized in the formulation of policy to prompt CO₂ emissions abatement in China.