The Carbon Content of Japan-US Trade

By Frank Ackerman, Masanobu Ishikawa, and Mikio Suga

Energy Policy, volume 35 no. 9, September 2007, pp.4455-4462.

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How much carbon is “embodied” in world trade? If one country imports carbon-intensive products from another, should the production emissions be attributed to the consuming nation rather than the producer? A growing empirical research literature addresses these questions. In the first study to examine the carbon content of trade between the world’s two largest industrial economies, Ackerman, Ishikawa, and Suga find that the US, on balance, is a small net importer of carbon from Japan – and that both countries are large net carbon importers from the rest of the world. In Japan-US trade, carbon-intensity of production has a weak but significantly positive correlation with comparative advantage. This article is the final product of a two-year research project, supported by the Japan Foundation/Center for Global Partnership, and co-directed by Professor Masanobu Ishikawa, of the economics department at Kobe University in Japan, and by Frank Ackerman.