Assessing Carbon Emissions Embodied in International Trade Based on Shared Responsibility

Author Name Palizha AIREBULE (Sumitomo Mitsui Trust Bank) / Haitao CHENG (Hitotsubashi University) / ISHIKAWA Jota (Faculty Fellow, RIETI)
Creation Date/NO. December 2021 21-E-099
Research Project Economic Policy Issues in the Global Economy
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We explore the carbon emissions of the world's five highest carbon emitters by applying the shared responsibility (SR) criterion, under which both producers and consumers share the responsibility for emissions. Using the SR method based on the value-added approach, we can investigate carbon emissions at both national and sectoral levels. Between 2002–2014, carbon emissions in China and India grew dramatically. SR increased by 157% in China and 116% in India. The main driving force of China's carbon emissions was the rapid growth of its exports, and the main driver of India's carbon emissions was its high carbon-intensive production technologies. Although carbon emissions had a declining trend in the USA and Japan, it could have resulted from cross-border carbon leakage. More than 40% of the five countries' national carbon emissions under SR were attributed to "electricity, gas, steam and air conditioning supply." This overwhelming share was attributable to their large amounts of production and high carbon emission intensity.