Change in CO2 emission and its transmissions between Korea and Japan using international input-output analysis

This paper is intended to analyze CO2 transmission between Japan and South Korea through international trade based on 1990 and 1995 international input-output data. It applied a residual-free structural decomposition method proposed by Chung and Rhee [Chung, H.S., Rhee, H.C., 2001. A residual-free decomposition of the sources of carbon dioxide emissions: a case of the Korean industries. Energy 26 (1), 15-30] to emission-related international input-output analysis for the first time in the decomposition studies. This paper is a case study regarding the manner and the extent to which CO2 emissions are influenced by international trade between Japan (an Annex I country) and South Korea (a non-Annex I country), which is of particular interest for the carbon leakage issue. In this paper, we attempted to show which factors contributed to the changes in emission of the major greenhouse gas in South Korea and Japan. The changes in emission are analyzed in terms of emission intensity, input techniques, demand composition, and trade structures. According to our analysis, South Korea, a non-Annex I country, has more energy-intensive production structures than Japan, an Annex I country. South Korea's trade pattern with Japan reflects these production features, resulting in the Korea's comparative advantage in emission intensive products, though the degree has somewhat mitigated in 1995 compared to 1990. (c) 2005 Elsevier B.V. All rights reserved.