Escalating Carbon Leakage via International Trade from 1990 to 2019 — Based on a New Method Measuring Consumption-based Carbon Emissions of 161 Countries

Abstract

Abstract Sustainable development remains a pivotal global priority, however, escalating carbon emissions present considerable challenges. One such challenge, carbon leakage –the transference of emissions via international trade –has been largely overlooked by current policies. This oversight may contribute to the difficulty in achieving carbon emission reduction. Using macroeconomic and trade data, this study proposes a new method named Emission Coefficient Multi-equation Method (ECMM) to quantify carbon leakage and consumption-based carbon emissions (CBCE) across 161 countries from 1990 to 2019. The results reveal that: a) The United States stands as the world's largest carbon consumer and importer, whereas China tops the list as the principal carbon producer and exporter. b) Since the Kyoto Protocol's implementation, developed countries with emission reduction commitments have successfully regulated their territorial carbon emissions. Yet, global carbon emissions continue to ascend. c) The decoupling of carbon emissions between consumption and production sites is intensifying, and substantial carbon transfers via international trade are evident. In light of these findings, we propose the compilation of a carbon emissions inventory pertaining to international trade. Furthermore, future international emissions reduction policies should emphasize regulating carbon consumption in addition to carbon production.