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Firm ownership, China's export related emissions, and the responsibility issue

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  • Jiang, Xuemei
  • Guan, Dabo
  • Zhang, Jin
  • Zhu, Kunfu
  • Green, Christopher

Abstract

China's CO2 emissions and those embodied in its exports have been extensively studied. One often neglected aspect is the prevalence of foreign-invested enterprises (FIEs) in China's exports, for which a substantial portion of benefits return to the investing countries. In this paper, we revisit China's export-related CO2 emission responsibilities by viewing them from a “new”, gross national income perspective. Using a recently developed environmental input–output framework, one which distinguishes firms by ownership and trade mode, we find that China's CO2 emissions responsibility for each Yuan of national income from FIE exports, is actually higher than that attributable to Chinese owned enterprise (COE) exports. The result has a somewhat surprising implication: it suggests another source of conflict between China's and global interest in reducing CO2 emissions. From a purely Chinese (as opposed to global) standpoint, a higher share of exports by COEs rather than FIEs is favorable, even though COEs emit more CO2 when producing each unit of exports. This finding should sound an additional warning to those who still think that global climate change mitigation can be effectively pursued by allocating country-by-country emissions responsibility.

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  • Jiang, Xuemei & Guan, Dabo & Zhang, Jin & Zhu, Kunfu & Green, Christopher, 2015. "Firm ownership, China's export related emissions, and the responsibility issue," Energy Economics, Elsevier, vol. 51(C), pages 466-474.
    • Handle: RePEc:eee:eneeco:v:51:y:2015:i:c:p:466-474
    DOI: 10.1016/j.eneco.2015.08.014
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    Cited by:

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    2. Zhang, Zengkai & Duan, Yuwan & Zhang, Wei, 2019. "Economic gains and environmental costs from China's exports: Regional inequality and trade heterogeneity," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    3. Su, Bin & Thomson, Elspeth, 2016. "China's carbon emissions embodied in (normal and processing) exports and their driving forces, 2006–2012," Energy Economics, Elsevier, vol. 59(C), pages 414-422.
    4. Zhou, Meifang & Liu, Yu & Feng, Shenghao & Liu, Yang & Lu, Yingying, 2018. "Decomposition of rebound effect: An energy-specific, general equilibrium analysis in the context of China," Applied Energy, Elsevier, vol. 221(C), pages 280-298.
    5. Yu, Liu & Meng, Bo & Hubacek, Klaus & Xue, Jinjun & Feng, Kuishuang & Gao, Yuning, 2016. "How does firm heterogeneity information impact the estimation of embodied carbon emissions in Chinese exports?," IDE Discussion Papers 592, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    6. Feng, Tong & Du, Huibin & Zhang, Zengkai & Mi, Zhifu & Guan, Dabo & Zuo, Jian, 2020. "Carbon transfer within China: Insights from production fragmentation," Energy Economics, Elsevier, vol. 86(C).
    7. Meng, Bo & Gao, Yuning & Ye, Jiabai & Zhang, Meichen & Xing, Yuqing, 2022. "Trade in factor income and the US-China trade balance," China Economic Review, Elsevier, vol. 73(C).
    8. Meng, Bo & Liu, Yu & Andrew, Robbie & Zhou, Meifang & Hubacek, Klaus & Xue, Jinjun & Peters, Glen & Gao, Yuning, 2018. "More than half of China’s CO2 emissions are from micro, small and medium-sized enterprises," Applied Energy, Elsevier, vol. 230(C), pages 712-725.
    9. Zengkai Zhang & Jiaoyan Li & Dabo Guan, 2023. "Value chain carbon footprints of Chinese listed companies," Nature Communications, Nature, vol. 14(1), pages 1-9, December.
    10. Yuting Dang & Yating Song & Muhammad Mohiuddin & Dan Sheng, 2022. "Towards Cleaner Production Ecosystem: An Analysis of Embodied Industrial Pollution in International Trade of China’s Processing versus Normal Exports," IJERPH, MDPI, vol. 19(16), pages 1-21, August.
    11. Yan, Yunfeng & Wang, Ran & Chen, Sida & Wang, Feifan & Zhao, Zhongxiu, 2022. "Mapping carbon footprint along global value chains: A study based on firm heterogeneity in China," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 398-408.
    12. Wang, Zhenguo & Su, Bin & Xie, Rui & Long, Haiyu, 2020. "China’s aggregate embodied CO2 emission intensity from 2007 to 2012: A multi-region multiplicative structural decomposition analysis," Energy Economics, Elsevier, vol. 85(C).
    13. Tian, Kailan & Dietzenbacher, Erik & Yan, Bingqian & Duan, Yuwan, 2020. "Upgrading or downgrading: China's regional carbon emission intensity evolution and its determinants," Energy Economics, Elsevier, vol. 91(C).
    14. Duan, Yuwan & Jiang, Xuemei, 2021. "Pollution haven or pollution halo? A Re-evaluation on the role of multinational enterprises in global CO2 emissions," Energy Economics, Elsevier, vol. 97(C).
    15. Yan, Bingqian & Duan, Yuwan & Wang, Shouyang, 2020. "China’s emissions embodied in exports: How regional and trade heterogeneity matter," Energy Economics, Elsevier, vol. 87(C).
    16. Zhong, Zhangqi & Jiang, Lei & Zhou, Peng, 2018. "Transnational transfer of carbon emissions embodied in trade: Characteristics and determinants from a spatial perspective," Energy, Elsevier, vol. 147(C), pages 858-875.
    17. Mateo Ortiz & María‐Ángeles Cadarso & Luis‐Antonio López, 2020. "The carbon footprint of foreign multinationals within the European Union," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1287-1299, December.
    18. Yan, Yunfeng & Li, Xiyuan & Wang, Ran & Pan, An, 2023. "Global value chain and export-embodied carbon emissions: New evidence from foreign-invested enterprises," Economic Modelling, Elsevier, vol. 127(C).
    19. Liu, Yu & Meng, Bo & Hubacek, Klaus & Xue, Jinjun & Feng, Kuishuang & Gao, Yuning, 2016. "‘Made in China’: A reevaluation of embodied CO2 emissions in Chinese exports using firm heterogeneity information," Applied Energy, Elsevier, vol. 184(C), pages 1106-1113.
    20. Ortiz, Mateo & Cadarso, María-Ángeles & López, Luis-Antonio & Jiang, Xuemei, 2022. "The trade-off between the economic and environmental footprints of multinationals’ foreign affiliates," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 85-97.
    21. Zhang, Zengkai & Lin, Jintai, 2018. "From production-based to consumption-based regional carbon inventories: Insight from spatial production fragmentation," Applied Energy, Elsevier, vol. 211(C), pages 549-567.
    22. Bagheri, Mehdi & Guevara, Zeus & Alikarami, Mohammad & Kennedy, Christopher A. & Doluweera, Ganesh, 2018. "Green growth planning: A multi-factor energy input-output analysis of the Canadian economy," Energy Economics, Elsevier, vol. 74(C), pages 708-720.
    23. Zhang, Zengkai & Zhu, Kunfu & Hewings, Geoffrey J.D., 2017. "A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation," Energy Economics, Elsevier, vol. 64(C), pages 13-23.
    24. Duan, Yuwan & Yan, Bingqian, 2021. "Has processing trade made China's exports cleaner? A regional level analysis," Energy Economics, Elsevier, vol. 96(C).

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    More about this item

    Keywords

    CO2 emissions responsibility; Input–output table; Foreign-invested enterprises; Processing exports; China;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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