Input-Output Analysis of Emissions Embodied in Swedish Imports from China, 1995-2009

Abstract: With the growth of international trade many researchers are questioning the effects on the environment by emissions embodied in international trade flows. The embodied emissions in the import (EEI) and export of Sweden are relatively unexplored despite being a trade-dependent country. However, a few earlier studies indicate that the largest share of embodied CO2 in the international trade of Sweden is in the import from China. This thesis evaluates Sweden’s EEI from China during the years 1995-2009 by using an input-output analysis with the emissions in bilateral trade approach. Different from existing studies, the sector distributions of the EEI are outlined with high transparency and the driving factors for the change in EEI are identified by using a structural decomposition analysis (SDA). Results shows that the EEI increased significantly from 1995-2009 and that the main increase occurred during 2002-2007. The import of electrical and optical equipment, textile products and renting of machinery and equipment contributed to the largest share of the EEI. The EEI induced from the total import were mainly generated from electricity, gas and water supply and other heavy industries. Results from the SDA showed that the scale effect from increased imports from especially heavy industries had a large influence on the growth in embodied CO2 emissions. The service sectors contributed to the second largest share of the increase in the EEI due to scale and structural effects. The technical effect, on the contrary, was markedly offsetting the increase of embodied CO2 emissions both for heavy and light industries.