Input-output analysis of carbon emissions embodied in China-Japan trade

Energy-related CO2 emissions embodied in international trade have been widely studied by researchers all over the world. By using the bilateral trade input-output (BTIO) approach, this study investigates the CO2 emissions embodied in China-Japan trade during 1995-2009 and attempts to identify the driving forces for the change in CO2 emissions embodied in China's exports to Japan during that period by using structural decomposition analysis (SDA). Result shows that CO2 emissions embodied in China's exports increased by about 100% from 1995 to 2009, whereas those embodied in China's imports increased by about 500% during the same period. Result of this research also reveals that the scale effect had a large influence on the increase in CO2 emissions embodied in China-Japan trade. The technical effect greatly decreased CO2 emissions embodied in China's exports to Japan, but obviously increased those embodied in imports. The influence of the structural effect was relatively small and insignificant in the change of CO2 emissions embodied in China's exports to Japan, but was notable in the change of emissions embodied in imports.