The New Environmentally Extended Input–Output Analysis to Measure Global Warming Potential in China

The production and processing of primary products have been the foundation of the China economy for 150 years. However, the economic benefit gained from the primary industries has come with associated environmental costs. These costs must be tackled by industry and farmers for four key reasons: (i) to prepare for the risk of regulation; (ii) to better manage resources; (iii) to increase competitiveness; and (iv) to respond to shifts in consumer preferences. Providing the necessary data to measure and understand the source and extent of environmental impacts is the first stage in addressing these costs. This assessment needs to be comprehensive and cover not only the direct impacts of an operation but also the indirect impacts downstream in the supply chain. The producer-centric approach is the prevalent way of viewing environmental pressures from production. However, consumption decisions also have an influence on environmental outcomes. While industry and farmers need to be aware of impacts on the environment from production, more information on how expenditure decisions by consumers have indirect impacts on the environment is needed as well. How this responsibility is best apportioned between producers and consumers is also an area of interest. This study uses new environmentally extended input–output analysis to report global warming potential in China. The first section of the paper presents the environmental pressures from a production perspective. The second section assigns environmental pressures to the final consumption categories: China households and the rest of the world. The final section applies the method recently described by Lenzen and colleagues to apportion responsibility for global warming potential between consumers and producers. The significance of the primary industries considered in this analysis can be seen from the fact that together they appropriated approximately 46% of the nation’s total global warming potential