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Research by SOAS economist published in top science journal

11 June 2013

A research paper on China's carbon dioxide (CO2) emissions, co-authored by a SOAS economist, was this week published by one of the top three science journals in the world.

The paper, entitled “Outsourcing CO2 within China”, was published in Proceedings of the National Academy of Sciences of the United States of America (PNAS) on 10 June 2013. Laixiang Sun, Professor of Chinese Business and Management at SOAS, University of London co-authored the study along with an international team.

This paper provides a detailed consumption-based accounting of CO2 emissions in China. Consumption-based accounting allocates emissions to the province where products are ultimately consumed, rather than simply focusing on where emissions occur. It shows that policies to reduce emissions in China may tend to push factories and production into developing regions of the country.

“China has set emissions targets which are more stringent in affluent coastal provinces than in less-developed interior provinces. This may reduce emissions in one region, but in China as a whole, you find CO2 emissions continue to increase, because the polluting factories move into the less-developed regions,” says Professor Sun, “instead, accounting for carbon emissions based on consumption rather than production could create better incentives and fair distribution of responsibilities to reduce greenhouse gas emissions both nationally and globally.”

China is currently the largest emitter of CO2, pumping out 7.2 gigatons of the greenhouse gas every year as of 2007, the year that the study examined. This emission figure shot up to about 10 gigatons in 2011. While the country has pledged to improve their CO2 intensity—the amount of emissions per unit of GDP—Professor Sun says, these efforts may simply encourage provinces to outsource their emissions to poorer regions, placing an unfair and unmanageable burden on those regions.

The same effect occurs on a global scale, as richer countries outsource polluting industries and manufacturing to developing countries—including China—where costs are lower and regulations may be more lax.

“We must reduce CO2 emissions, not just outsource them,” says Professor Sun. “Developed regions and countries need to take some responsibility, providing technology support and investment to promote cleaner, greener technology in less-developed regions.”

Overall, 57 per cent of China’s fossil fuel emissions were from production of things eventually consumed in a different province or in another country. This study for the first time quantified these emissions on a detailed regional scale. The researchers used an economic input-output model that can track trade flows across sectors and regions, accounting for emissions triggered by final consumption across the entire global supply chain.

“While SOAS is known for its arts, humanities and social sciences, our global academic network means that we are increasingly working in interdisciplinary ways. I am delighted that this work raises the School's profile in the science community," Professor Sun says.