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Mineral Economics

, Volume 24, Issue 2–3, pp 103–117 | Cite as

Who should bear the cost of China’s carbon emissions embodied in goods for exports?

  • ZhongXiang Zhang
Original Paper

Abstract

China’s capital-intensive, export-oriented, spectacular economic growth since launching its open-door policy and economic reforms in late 1978 not only has created jobs and has lifted millions of the Chinese people out of poverty, but also has given rise to unprecedented environmental pollution and CO2 emissions. While estimates of the embedded CO2 emissions in China’s trade differ, both single-country studies for China and global studies show a hefty chunk of China’s CO2 emissions embedded in trade. This portion of CO2 emissions had helped to turn China into the world’s largest carbon emitter, and is further widening its gap with the second largest emitter. This raises the issue of who should be responsible for this portion of emissions and bearing the carbon cost of exports. China certainly wants importers to cover some, if not all, of that costs. While China’s stance is understandable, this paper has argued from a broad and balanced perspective that if this is pushed too far, it will not help to find solutions to this issue. On the contrary, it can be to China’s disadvantage for a number of reasons. However, aligning this responsibility with China does not necessarily suggest the sole reliance on domestic actions. In that context, the paper recommends specific actions that need to be taken internationally as well as domestically in order to effectively control the embedded CO2 emissions in China’s trade.

Keywords

Carbon emissions embodied in trade Consumption-based accounting Production-based accounting Processing trade Carbon tariffs Energy policy 

JEL classification

F18 P28 Q42 Q43 Q48 Q53 Q54 Q56 Q58 

Notes

Acknowledgments

I initially talked about the issues related to consumption-based CO2 emissions at the US National Intelligence Council Project’s Conference on Climate Change and its Implications through 2020, University of Maryland at College Park, June 28, 2004. The views in this paper in part or whole were also presented at the International Conference on Economic Policy Simulation and Technological Innovation, A Chinese Academy of Social Sciences Forum, Beijing, November 5-6, 2011 and expressed in a series of the seminars in National Climate Center of China Meteorological Administration, the Chinese Academy of Sciences, the Chinese Academy of Social Sciences, Energy Research Institute of the National Development and Reform Commission, Peking University and Tsinghua University, Beijing, China. That said, they are those of the author. The author bears sole responsibility for any errors and omissions that may remain.

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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Research Program, East–West CenterHonoluluUSA
  2. 2.Center for Energy Economics and Strategy Studies; and Research Institute for the Changing Global EnvironmentFudan UniversityShanghaiChina
  3. 3.Institute of Policy and ManagementChinese Academy of SciencesBeijingChina
  4. 4.China Centre for Urban and Regional Development ResearchPeking UniversityBeijingChina
  5. 5.Centre for Climate Economics and Policy, Crawford School of Economics and GovernmentThe Australian National UniversityCanberraAustralia

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