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Bi-lateral CO2 emissions embodied in Australia–China trade

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  • Jayanthakumaran, Kankesu
  • Liu, Ying

Abstract

This paper quantifies the CO2 emissions embodied in bi-lateral trade between Australia and China using a sectoral input–output model. The results revealed: (1) that China performs lower than Australia in clean technology in the primary, manufacturing, energy sectors due to their overuse of coal and inefficient sectoral production processes, and (2) that China had a 30.94Mt surplus of bi-lateral CO2 emissions in 2010–2011 and (3) overall global emissions were reduced by 20.19Mt through Australia–China trade in 2010–2011. The result indicates that the greater the energy efficient a country among the trading partners the lower will be the overall global CO2 emissions. Global emissions decreased mainly because China consumed Australian primary products rather than producing them. Australia is an energy efficient producer of primary products relative to China. The bilateral trade compositions and trade volume played an important role in lowering global emissions and therefore one can view proposed China Australia Free trade Agreement positively in reducing global emissions. However, for the sustainable development, China should strengthen clean energy use and both countries should adopt measures to create an emission trading scheme in order to avoid protectionism in the form of future border price adjustments.

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  • Jayanthakumaran, Kankesu & Liu, Ying, 2016. "Bi-lateral CO2 emissions embodied in Australia–China trade," Energy Policy, Elsevier, vol. 92(C), pages 205-213.
    • Handle: RePEc:eee:enepol:v:92:y:2016:i:c:p:205-213
    DOI: 10.1016/j.enpol.2016.02.011
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    Cited by:

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    3. Suvajit Banerjee, 2021. "Addressing the carbon emissions embodied in India’s bilateral trade with two eminent Annex-II parties: with input–output and spatial decomposition analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(4), pages 5430-5464, April.
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    5. Mi, Zhifu & Zheng, Jiali & Meng, Jing & Zheng, Heran & Li, Xian & Coffman, D'Maris & Woltjer, Johan & Wang, Shouyang & Guan, Dabo, 2019. "Carbon emissions of cities from a consumption-based perspective," Applied Energy, Elsevier, vol. 235(C), pages 509-518.
    6. Ding, Tao & Ning, Yadong & Zhang, Yan, 2018. "The contribution of China’s bilateral trade to global carbon emissions in the context of globalization," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 78-88.
    7. Huang, Rui & Chen, Guangwu & Lv, Guonian & Malik, Arunima & Shi, Xunpeng & Xie, Xiaotian, 2020. "The effect of technology spillover on CO2 emissions embodied in China-Australia trade," Energy Policy, Elsevier, vol. 144(C).
    8. Suvajit Banerjee, 2020. "Carbon Emissions Embodied in India–United Kingdom Trade: A Case Study on North–South Debate," Foreign Trade Review, , vol. 55(2), pages 199-215, May.
    9. Jing-Li Fan & Qian Wang & Shiwei Yu & Yun-Bing Hou & Yi-Ming Wei, 2017. "The evolution of CO2 emissions in international trade for major economies: a perspective from the global supply chain," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(8), pages 1229-1248, December.
    10. 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.
    11. Tao Ding & Yadong Ning & Yan Zhang, 2017. "The Contribution of China’s Outward Foreign Direct Investment (OFDI) to the Reduction of Global CO 2 Emissions," Sustainability, MDPI, vol. 9(5), pages 1-15, May.
    12. Chen, Guangwu & Wiedmann, Thomas & Wang, Yafei & Hadjikakou, Michalis, 2016. "Transnational city carbon footprint networks – Exploring carbon links between Australian and Chinese cities," Applied Energy, Elsevier, vol. 184(C), pages 1082-1092.
    13. Vinicius A. Vale & Fernando S. Perobelli & Ariaster B. Chimeli, 2018. "International trade, pollution, and economic structure: evidence on CO2 emissions for the North and the South," Economic Systems Research, Taylor & Francis Journals, vol. 30(1), pages 1-17, January.
    14. Tang, Ling & Wang, Haohan & Li, Ling & Yang, Kaitong & Mi, Zhifu, 2020. "Quantitative models in emission trading system research: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    15. Banerjee, Suvajit, 2021. "Conjugation of border and domestic carbon adjustment and implications under production and consumption-based accounting of India's National Emission Inventory: A recursive dynamic CGE analysis," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 68-86.
    16. Shichun Xu & Chang Gao & Yunfan Li & Xiaoxue Ma & Yifeng Zhou & Zhengxia He & Bin Zhao & Shuxiao Wang, 2019. "What Influences the Cross-Border Air Pollutant Transfer in China–United States Trade: A Comparative Analysis Using the Extended IO-SDA Method," Sustainability, MDPI, vol. 11(22), pages 1-21, November.

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    More about this item

    Keywords

    F18; C67; L51; Keywords:; Carbon leakage; Australia–China bilateral trade; Input–output table;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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