Will China's trade restructuring reduce emissions embodied in international exports?

     China’s CO2 emission export embodied in international trade has recently attracted more attention and raises questions on the liability and responsibility for Chinese-produced environmental costs. Given that embodied... [ view full abstract ]

     China’s CO₂ emission export embodied in international trade has recently attracted more attention and raises questions on the liability and responsibility for Chinese-produced environmental costs. Given that embodied emissions exports and imports are normal phenomenon during international trade, the key question focuses on China’s reduction of embodied emissions exports via trade restructuring. The present study addressed the question “will trade restructuring reduce China’s embodied CO₂ emissions exports”. 

      The trade restructuring optimization model combined with the input-output analysis and multi-objective programming was established in this study to analyze China’s maximum volume of embodied emissions reduction within the bearable costs. The research results suggest that trade-off costs on economic loss and unemployment is very high for China to reduce embodied emissions exports given that the export-oriented sectors in China are embodied CO₂ emission-intensive and are located in nearly the same sectors as the labor-intensive and high added-value exports. The reducing rates of embodied CO₂ emissions net exports are only 3.26% under the reasonable scenario. It is difficult for China to reduce embodied CO₂ emissions exports by relying only on trade restructuring. A previous policy suggestion on the adjustment China’s import-export structure has limited effects on the reduction of embodied emission exports. Employment is the principal constraint for embodied CO₂ emissions exports reductions and has not shown significant reductions even with unemployment constraint modifications.  However, recent improvements in the industrial and energy consumption structures have gradually changed increasing trend of China’s embodied CO₂ emission exports given that the country’s trade structure originated from its economy and industry structure. Continuous improvement on the Chinese economic and industrial structures show long-term sustainable development that can further reduce CO₂ emissions and be beneficial for both China and the world.