Exports Account for One-Third of China’s Emissions

As Chinese manufacturers feed a growing global appetite for cheap goods, these exports account for a rising share of the country's greenhouse gas emissions, a new study reveals.

Exports are now responsible for one-third of China's emissions, according to a study that will appear in the journal Energy Policy. The researchers describe their analysis as the most systematic study of the subject to date.

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In 2005, the most recent year for which data are available, China emitted an estimated 1.7 billion tons of carbon dioxide-equivalent during production of its exports. This is a steady increase from the estimated 230 million tons from exports in 1987, which represented 12 percent of the country's net emissions, the study said.

China's exports industry, which is responsible for about 8.7 percent of world trade by value, is emitting greenhouse gases at a rate faster than the country's overall emissions rate. China's manufacturing industry is powered mostly by coal.

China's rapid industrialization is the leading factor behind the 22 percent leap in global greenhouse gas emissions from fossil fuels over the past eight years. An estimated 70 percent of the country's primary energy comes from coal, and Chinese domestic electricity demand roughly doubled during this period. More than half of the estimated 8.2 billion tons of fossil fuel emissions released worldwide between 2000 and 2007 came from Chinese sources, according to a Worldwatch Institute analysis released last week.

Exports of carbon-intensive metal products comprise a growing share of Chinese exports - 13 percent in 2005, compared to 7 percent a decade earlier, the study said. China's main exports are electronics.

The study notes that China's model of cheap production may also prove beneficial for the global environment, as manufacturers make advances in cheap, energy-efficient lighting, wind turbines, and other "green" technologies. "Any increased emission from production of these products in China would likely be outweighed by the positive impacts of their use," the study says.

The study included the fact that Chinese industries often rely on imported materials to produce exported goods. While this accounting takes a step beyond previous studies, several assumptions still may make the study incomplete, the researchers concede. For instance, they estimate that manufactured goods produce equal levels of emissions regardless of whether they are exported or sold to domestic buyers. "The exporting industry may be more efficient than the national average due to greater foreign investment and newer technology," said lead author Chris Weber, an environmental engineering assistant professor at Carnegie Mellon University.

Emerging industrializing countries such as China and India are playing a major role in the latest round of international climate negotiations, aimed at developing a successor agreement to the current Kyoto Protocol. As a developing country, China was excused from the Kyoto agreement. The United States, a major importer of Chinese goods, did not ratify the treaty in part out of a concern that the U.S. economy would suffer unless China was included. 

Although China is not required to reduce its emissions under current international law, the government is encouraging export industries to transition to more energy-efficient technologies. The goal is to improve energy intensity (the energy required to generate $1 of national income) to 20 percent of the 2005 level by the end of the decade. "China has a very strict regulation for energy intensity for trade products, so they actually discourage exports of energy-intensive, carbon-intensive products...no matter if this product is consumed in China or abroad," said Shui Bin, a research scientist at the U.S. Department of Energy's Pacific Northwest National Laboratory.

China has had difficulty meeting its efficiency goals, however. In a report released last week, the National Bureau of Statistics said the country's energy intensity during the first six months of 2008 decreased 2.88 percent, well below the target of 4 percent. Last year's reduction was 3.66 percent. "We still need tremendous efforts to achieve the 20 percent goal," said Xie Zenhua, vice minister of the National Development and Reform Commission.

To achieve these targets, the government has begun eliminating tax breaks for less-efficient industries. Earlier this month, tax rebates were removed for companies that export energy-intensive products including pesticides, zinc, and silver. "Out of considerations of energy security and climate change, China has scraped rebates and raised tariffs on a series of energy-intensive exports, including steel and ferrous alloys, to discourage the blind expansion of this sector," said Yingling Liu, China program manager at the Worldwatch Institute.