ABSTRACT
Along with the increasingly multinational production of goods and services in the global value chain, the potential relocation of environmental pollution overseas has been attracting attention. This chapter examines whether China has been causing CO2 emissions to rise in its bilateral trade partners. We selected four Asian countries (Vietnam, Indonesia, India, and Japan) and examined the problem using two approaches (single- and multi-region input–output analyses) in 2005 and 2015. This chapter obtained three findings: (1) the carbon leakage from Japan to China decreased, however, China increased domestic CO2 emissions and exports to Vietnam, Indonesia, and India from 2005 to 2015; (2) such increases were related less to the upgrade of production technology in China, but more to China’s growing net trade surplus; and (3) different from other China’s trade partners, Vietnam’s export of emission-intensive goods and services to China have increased during 2005–2015. We further looked into input coefficients from the electricity supply sector in all sectors. The improvement in power generation technologies does not only contribute to the national-level emission reduction directly, but other sectors may also benefit from a greener power generation mix (e.g., the petrochemical industry in China, the textile industry in Vietnam in a reverse way). Importing more emission-intensive goods from other countries instead of domestic production does not help global emission reduction.
