Keywords: carbon dioxide emissions, CO2 emissions, carbon emissions, international trade, production responsibility, consumption responsibility, emissions displacement, manufactured products, accounting methods, Kyoto Protocol, Italy, China, bi-lateral trade
The responsibility of CO2 embodied in Italy-China trade: a consumption-based approach
This paper presents a theoretical model to allocate emission responsibility between producers or consumers and estimates: (1) the carbon dioxide (CO2) emissions embodied in the bi-lateral trade of manufactured products between Italy and China from 1997 to 2003 and (2) the CO2 emissions avoided in Italy and China by importing products of bi-lateral trade. Adopting a consumption-based approach and applying the accounting method proposed by Shui and Harriss (2006), this paper reveals that Italy is responsible for 54 MMT of CO2 emitted in China and highlights that international trade contributes both to the increased CO2 emissions and to the displacement of CO2 production in developing countries. Since in the context of globalisation the commodities are not necessarily produced and consumed by the country itself, the CO2 emissions embodied in trade have to be considered so as to improve the carbon accounting methods as for the Kyoto Protocol.