Environ-Economic Balance Analysis in Bilateral Industrial Trade: A Comparison Between Australia and China

Abstract

Exchanges of products and services in bilateral industries may be accompanied by environmental and economic inequalities which lead to imbalanced situations in relation to environmental protection and economic development. In a close trade relationship between two countries such as Australia and China, their industries inevitably affect each other. This study maps the embodied CO2 emissions and value added in bilateral trade under the input–output model and measures the unequal exchanges in such trade using an originally established industrial environ-economic balance index. The bilateral trade between Australia and China is taken as an example to validate the outcomes of the research method. The results indicate that in 2014, Australia transferred 580.90 billion tons of CO2 and 105.85 billion USD of value added to China, while approximately 375.65 billion tons of CO2 and 25.15 billion USD of value added flowed from China to Australia. China’s manufacturing, construction, and services and other industries, and China’s and Australia’s real estate activities industries had net inflows of embodied CO2 emissions and value added, indicating these industries paid economic costs in return for reducing environmental pressure. In inter-industrial trade between Australia and China, 49 pairs of bilateral industrial trades were relatively fairly balanced, while the remaining 15 pairs of inter-industrial trades were imbalanced. The established environ-economic balance analysis method and quantitative findings are valuable for better understanding the environment impacts of the economic development of national economies and developing national policies in corresponding to the rising environmental issues.

Internationalization of the Construction Industry in the Global Value Chain

“…An empirical study has also proved that the countries with a low degree of participation in GVC experienced a great many difficulties in the reduction of emissions in the short to medium term (Wang et al, 2019). An industrial environ-economic balance index can be adopted to estimate the situation of two countries in bilateral trade based on the value added and environmental indicators (Gao et al, 2022). A similar finding shows that the high degree of GVC participation facilitates the transfer of carbon emission within the trade and brings a negative influence on activities of carbon reduction (Zhong et al, 2021).…”

Border-crossing frequencies of CO2 embodied in international trade of construction products for final demand

“…Jayanthakumaran and Liu (2016), for example, suggested that the bilateral trade between Australia and China plays an important role in lowering global CO 2 emissions and that both countries should adopt measures to avoid future border-price adjustment by reaching consensus on a sustainable trading scheme. However, a bilateral input-output model does not reveal the complex relationship between multi-regional economic activities and environmental pollution (Gao et al, 2022). With the development of international production networks, MRIO analysis has been introduced in order to draw a comprehensive picture of embodied CO 2 transfer amongst participants in global production chains.…”