The embodiment of carbon in imports of manufactured products

The design of many greenhouse gas policies is predicated on controlling emissions by reducing domestic greenhouse gas (GHG) emissions. This ignores the importance of carbon embodied in international trade flows which could take on increased importance if emission reduction schemes are undertaken which include only a subset of GHG emitting countries. This article estimates the amount of carbon embodied in the imports of manufactured goods to six of the largest OECD countries — Canada, France, Germany, Japan, the UK and the USA — in order to determine whether or not the importation of carbon rich products is a problem worth addressing. The estimates reveal that a significant amount, about 13% of the total carbon emissions of these countries, is estimated to be embodied in manufactured imports. The article concludes by suggesting a number of policy implications that can be drawn from these findings.