Decomposition analysis of CO2 emissions embodied in the international trade of Russia

Abstract

Our study improves the decomposition method based on the input-output approach to analyze CO2 emissions embodied in the international trade of Russia over the period from 1995 to 2014. The research finds out that carbon was transferred from the upstream resource sectors to the downstream manufacturing sectors and service sectors in Russia. Moreover, Russia was a net exporter of CO2 emissions. 31.46% of Russia's CO2 emissions were generated for other countries' consumption in 1999 while 10.68% in 2013. Basic resource and energy sectors were the significant emitters of exporting CO2 emissions. Sectors from traditional manufacturing industries and modern technical industries played an important role in importing embodied CO2 emissions of Russia. Moreover, the effect of modern technical industries on importing embodied CO2 emissions was increasing. The period after 2003 witnessed a substantial decline in Russia's carbon intensities, which was majorly due to the transformation of the energy structure. Decomposition analysis of CO2 emissions embodied in the international trade can show the trading effect on embodied CO2 emissions from both exporting and importing perspectives. Russia's case is able to provide instructive implications to the global climate mitigation policy. Countries that burden CO2 emissions for other countries' consumption are encouraged to participate in the climate negotiation effectively and internalize environmental costs by products' and services' pricing in the international trade.