Input-output analysis of CO2 emissions embodied in trade: A multi-region model for China

Energy-related CO2 emissions embodied in international trade have been widely studied at the national level in recent years. The embodiment estimates help to explain the “weak carbon leakage” between industrial and developing countries and to reveal the so-called “consumption-based” emissions (or carbon footprint). These findings have implications on national climate policy and international negotiations. For a large country like China, spatial aggregation issues are important in embodied emission studies. Dividing the country into several regions, previous studies propose the hybrid emissions embodied in trade (HEET) approach for regional emission studies and use step-wise distribution of emissions embodied in trade (SWD-EET) analysis to explain indirect absorption patterns. In this paper, we combine the HEET approach and SWD-EET analysis to conduct a comprehensive study of China's regional emission embodiments. We explain how inter-regional trade and international trade affect China's regional domestic emissions, and present the resulting regional carbon footprint. Policy implications from the empirical results obtained are discussed.