Abstract:

The cross-border separation of production and consumption activities has become increasingly common in the context of the deepening division of global production networks. The traditional trade statistic method, which is based on the standard of cross-border and final products, cannot accurately describe the trade interests of a country effectively. Therefore, based on the traditional trade statistics perspective, the use of competitive input-output methods to calculate the trade implied carbon emissions data will be overvalued. In this study, we used a newly developed non-competitive input-output method, incorporating value-added trade, to recalculate the intensity of embodied carbon emission in 27 trading industry sectors between China and Japan during 2000 to 2014. Our results reveal that although China experiences a huge trade deficit when trading with Japan, it is a net surplus country regarding carbon emissions embodied in China-Japan trade. Traditional trade modeling overestimates carbon emissions embodied in trade between China and Japan. On the whole, carbon emissions embodied in exports from China to Japan are overestimated by 982 million tons, carbon emissions contained in imports by China from Japan are overestimated by 392 million tons during the whole period. From a sub-industry perspectives, industries like mining, wood processing and furniture manufacturing, transportation, leasing and business services, and metal products in China are the most overestimated industry sectors, with an average overvalued rate of up to 68.2%.

Key words: new value-added trade, technology heterogeneity, implicit carbon emissions, non-competitive input-output method, China-Japan trade