The contribution of Chinese exports to climate change

Within 5 years, Chinaʹs CO2 emissions have nearly doubled, and China may already be the worldʹs largest emitter of CO2. Evidence suggests that exports could be a main cause for the rise in Chinese CO2 emissions; however, no systematic study has analyzed this issue, especially over time. We find that in 2005, around one-third of Chinese emissions (1700 Mt CO2) were due to production of exports, and this proportion has risen from 12% (230 Mt) in 1987 and only 21% (760 Mt) as recently as 2002. It is likely that consumption in the developed world is driving this trend. A majority of these emissions have largely escaped the scrutiny of arguments over “carbon leakage” due to the current, narrow definition of leakage. Climate policies which would make the developed world responsible for Chinaʹs export emissions have both benefits and costs, and must be carefully designed to achieve political consensus and equity. Whoever is responsible for these emissions, Chinaʹs rapidly expanding infrastructure and inefficient coal-powered electricity system need urgent attention.