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«CO2 EMISSIONS EMBODIED IN CHINA’S TRADE AND REDUCTION POLICY ASSESSMENT Tianyu Qi a,b,, Niven Winchester b,Valerie J. Karplus b, Xiliang Zhang a ...»

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Estimates of embodied carbon emissions are sensitive to trade values and patterns. Given the limited availability and long lead times that precede the release of global input-output dataset, we conduct our research based on 2007 data. However, with the impact of global economic slowdown starting in 2008, China’s trade surplus has shrunk from 261.8 billion dollars in 2007 to 155.1 billion dollars in 2011 (National Bureau of Statistics of China, 2011;

National Bureau of Statistics of China, 2012). Meanwhile, if the current expansion of China’s domestic demand continues, it is predicted that China may rank as top global importer within a few years (Xinhua, 2012). If this occurs, the trade surplus of China would be further reduced relative to that in our database. Concerns around trade-embodied carbon emissions would be potentially mitigated or replaced by concerns about the energy and CO2 intensity of consumption. Furthermore, the impact of the policies discussed in this paper on CO2 emissions is limited, in part because these policies do not address the potential for displacing emissions from targeted industries to other sectors. A carbon tax or comprehensive nation-wide cap-and-trade regime may be more effective in this regard. China will start emissions trading systems in seven pilot provinces in 2013 and aims to extend the market to the entire country in 2015 (China Securities Journal, 2012).

Implementation of a carbon tax is also being considered in China (Economic Information Daily, 2012). These policies present a more economically efficient way to constrain energy consumption and emissions from all sectors in a more cost-effective manner.

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