Weighing China's embodied CO2 emissions and value added under global value chains: Trends, characteristics, and paths

With the accelerated expansion of global value chains (GVCs), China occupies an increasingly important position in the global production division system, which has important impacts for its economy and environment. Comprehensively measuring the economic benefits and emissions costs of China's participation in GVCs, and striving to achieve a mutually beneficial state of GVC upgrade and low-carbon economic development, are critical issues for China. This study applies the accounting framework of value-added trade and embodied CO2 emission trade to measure the potential CO2 emissions cost of China's value-added gains through traditional trade, simple GVC, and complex GVC from 2000 to 2014. The findings are fourfold. (1) Compared with traditional trade, GVC-related activities require higher carbon emissions costs to obtain value added, which exacerbates China's economic-environmental imbalance. (2) Electricity, Metals, and Non-metallic mineral industries are the primary sectors of embodied CO2 emissions exports, and they bear heavy emissions pressure while obtaining limited value added. (3) China's embodied CO2 trade and value-added trade with developing countries through GVCs are rising, whereas the trade with developed countries reveals a downward trend. (4) The characteristics of China's industrial paths under different trade routes vary considerably. CO2 emissions in the industrial path of GVC-related activities are more hidden, and comprehensive management must be carried out throughout the entire industrial chain from production to consumption. This study proposes policy recommendations for the coordinated development of economic and environmental relations, such as reducing the carbon intensity of key industries, strengthening trade cooperation with emerging economies, and enhancing China's position in GVCs.

Automated summary

With the expansion of global value chains, China's role in the global production division system has become increasingly important. However, participating in global value chains also leads to an economic-environmental imbalance for China. This study finds that activities related to value chains require higher carbon emissions costs compared to traditional trade. The electricity, metals, and non-metallic mineral industries bear heavy emissions pressure while obtaining limited value added. China's CO2 trade and value-added trade with developing countries through global value chains are increasing, while trade with developed countries shows a downward trend. The characteristics of China's industrial paths vary considerably under different trade routes.