Study on the Optimal Allocation of CO2 Emissions Embodied in Trades : From the Perspective of Impacts on Low Carbon Policies

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This research aimed at proposing appropriate sharing scheme of responsibility of CO_2 emissions embodied in international trades through a quantitative assessment of impacts of domestic climate policies as well as border adjustment measures. We estimated CO_2 emissions embodied in international trades using sectoral CO_2 emissions of GTAP-E database as well as Asia International Input-Output table in 2000, and calculated responsible emissions of each country under different responsibility sharing schemes. We also assessed the impacts of border adjustment measures for mitigating international competitiveness drawbacks and carbon leakage associated with domestic climate policies on CO_2 emissions embodied in international trades, using multi-regional computable general equilibrium model. Based on the simulation results, border adjustment measures could be effective in mitigating carbon leakage caused by Japanese carbon tax but the welfare level of Japan may decline.