The roots of carbon emission differences between China and USA: A quantitative study based on global value chains.

ABSTRACT

China and the USA, as preeminent contributors to global carbon emissions, demonstrate discernible differentials in both magnitude and trajectories of their respective carbon outputs. This article employed two methods, Structural Decomposition Analysis (SDA) and Quantitative Structural Modeling, to scrutinize the underpinnings of these disparities through the lens of the global value chain. Drawing upon data from the World Input-Output Database (WIOD), our analysis revealed that the compounded influences of output composition, input intensity, input composition and input origin collectively elevated China's aggregate carbon footprint from 2000 to 2014, while the scale effect made China's carbon emissions lower than of the USA. Notably, China's carbon emissions surpassed those of USA, with the gap accentuating over time. The quantitative results of the structural model showed that the difference in carbon emissions between China and USA predominantly stem from disparities in productivity, production technology, factor intensity, factor endowment and direct carbon intensity. Differences in trade costs exhibited some discernible impact, their influence remains relatively marginal, whereas distinctions in consumption behaviors and trade imbalances minimally contribute to the observed differentials. These findings have important policy implications for global carbon reduction efforts and China's trajectory towards a low-carbon economic paradigm.