4.2 Emissions in Final Demand
In the viewpoint of CO2 emissions in final consumption, final demand includes four categories, including capital formation, government expenditure, changes in inventories, and household consumption. In Fig. 2, the highest contributor to consumer-based emissions is household consumption. Vietnam has the largest proportion of emissions attributable to household consumption. Household consumption accounts for a variety of emissions percentages, such as 54% (Australia), 49% (India), 60% (Japan), 60% (Russia), 65% (South Korea), 70% (Taiwan) and 75% (Vietnam). Consumption-based emissions are substantially influenced by urbanization, major economic development, and government controls. In five nations, capital formation accounts for more than 40% of emissions, i.e., Brunei (56%), China (52%), Indonesia (46%), Thailand (46%), and India (45%). Brunei has the largest percentage of capital formation-related emissions, which are determined by the consumption behavior of this country. In 2015, capital formation represented approximately 56% of the total final demand in the country.
4.3 Carbon Intensity of Trade
Figure 3 shows the mean carbon concentration of trade in terms of kg CO2 per US$ of exports or imports of each country. Carbon intensity is premeditated by the quantity of CO2 emissions per unit energy (ft) divided by the amount of energy consumption per US$ of trade of an individual country. Brunei, Japan, South Korea, and China have the highest total carbon intensity in exports due to the scarcity of carbon-intensive fuels like coal in these regions and the low volume of energy-intensive exports. On the other hand, New Zealand, the Philippines, and Indonesia require a higher value per unit of energy for their exports. In addition, a more significant percentage of that energy was produced using the low-carbon innovation technique. Central Pacific export markets have a much lower carbon intensity than Asian economies.
Goods imported into Cambodia and Indonesia contain significantly higher CO2 per US $ than their exports, representing imports of energy-intensive commodities abroad. On the other hand, the carbon intensity of imports to Brunei, Japan, South Korea, China, and India is significantly lower than their exports. For example, imports to South Korea, India, and China entail 0.37, 0.27, and 0.24 (MJ) per US$, respectively. Imports have the same carbon intensity as exports in New Zealand, indicating a tighter balance of manufacturing and service sectors in the New Zealand economy.
4.4 Embodied Emission in Exports and Imports
Figure 3 displays the carbon emissions in personified imports and exports, which differ significantly in the 17 Asia and Pacific countries. Emissions exemplified in imports in the three Asian nations of Japan, China, and India are significantly higher than in other pacific nations. For instance, Japan emits 3.16 Gt CO2 emissions embodied in imports, which is 99 times greater than Brunei. The sectors of mining support; electricity, gas, water supply; and construction contribute the most significant emissions embodied in imports. Mining support imports in China emit 52.08 Gt CO2, accounting for 2.4% of total embodied emissions of imports. However, in India, the imports of Mining support produce 35.19 Gt CO2, which is the highest embodied imported emission in this country. Electricity, gas, and water contribute the highest CO2 emission in imports in China (93.83 Gt CO2) and South Korea (25.52 Gt CO2). Furthermore, the building industry contributes significantly higher carbon emissions to Australia (13.19 Gt CO2), Japan (11.67 Gt CO2), and India (5.51 Gt CO2). Additionally, emissions imported to China exceed far that of any other country, mainly embodied in agriculture, forestry and fishing (3.09 Gt); textiles, wearing apparel, leather (3.58 Gt); coke and refined petroleum (4.92 Gt); manufacture of basic metals (3.82 Gt); fabricated metal products (3.92 Gt); telecommunications (4.51 Gt); and financial and insurance activities (8.25 Gt).
Figure 4 indicated that the embodied emissions in most countries' exports are higher than the embodied emissions in their imports. Such as, the emissions embodied in China's trades have 166.14 Gt CO2, but those of its imports are just 2.82 Gt CO2. Furthermore, China's manufacturing has a lower carbon intensity than its exports. One unit of imports emits more CO2 than a comparable unit of exports. Nevertheless, in New Zealand and the Philippines, the embodied emissions in exports are lower than those in imports. In many areas, consumer duty outweighs producer accountability. For example, the following exports are responsible for China's massive emissions imbalance: real estate activities (317.12 Gt CO2), mining support (233.56 Gt), arts, entertainment (166.14 Gt), electricity, gas, water supply (69.52 Gt), agriculture, forestry and fishing (26.93 Gt), and financial and insurance activities (358 Gt).
In Fig. 5, row 1, this study illustrates the CBCE for the top 10 countries in Asia and the Pacific region. The four Asian countries have the highest overall consumption-based emissions, such as China (387451.95 Mt CO2), Japan (185259.60 Mt CO2), India (100720.46 Mt CO2), and S. Korea (90223.37 Mt CO2). China and India ranked top two countries for emitting the highest CO2 emissions, 59604.16 and 57499.86 kg per $GDP, respectively. Figure 5, row 1 shows that in South Korea, Brunei, and Taiwan, annual consumption-based emissions are 1.77, 1.62, and 1.49 tons of CO2 per person, respectively. Consumption-based emissions per capita in China are extremely low, at 0.28 tones CO2 per person. However, the overall consumption-based emissions in this country are very high. A significant difference between per capita emissions and consumption-based emissions has been illustrated based on total carbon emissions and per capita consumption. Therefore, the methods of computing emissions have a substantial impact on determining who is responsible for climate change mitigation. This study is in line with Peters and Hertwich (2008); Peters et al. (2011); and Knight and Schor (2014), who estimate similar findings. Therefore, when determining equitable mitigation measures, consumption-based carbon accounting methodologies must be thoroughly evaluated (Caney, 2009).
In Fig. 5 indicated the total emissions embodied in imports are presented. Emerging economies are more likely to import CO2 emissions. Being the most developing nations in Asia and the Pacific, China and Japan have the highest emissions embodied in imports. In contrast, in two less advanced countries, the least number of emissions are embodied in imports in Brunei and Cambodia. It indicates that manufacturing-based nations continue to grow consumption-based nations as these nations progress socioeconomically. Overall imported emissions are most significant in, i.e., China (243863.34 Mt CO2), Japan (116816.47 Mt CO2), India (86680.84 Mt CO2), and S. Korea (66022.48 Mt CO2). India is the highest CO2 emitter in imported per $GDP. Hongkong and Singapore ranked first and second positions for per capita imported emissions, 2.94 and 2.89 tones per capita. The conclusions of this study support Feng et al. 2013; and Mi et al. 2018 who calculate country-level CBE. In the circumstance of exports (Fig. 5, row 4, Left), emissions embodied in exports are most significant in Taiwan and Korea, which is a primary reason for these countries' high production-based CO2 emissions. Korea and Japan ranked first and the second position for per capita exported emissions such as 85.5 and 24.35 tones per person.
Using 50,000 Monte Carlo simulations, we show the likely CO2 emission peaks in four final demand categories (Fig. 6). This study uses 95 percent confidence intervals to choose probable simulation results that follow a normal distribution to reduce the effects of extreme values. The mean value of expected carbon emissions changes in inventory is 0.43 Gt, with a standard deviation of 0.86 Gt (Fig. 6d). The most likely peaking range is between − 1.0 and 1.2 Gt CO2. Therefore, compared to 2015, inventory carbon emissions will grow by 35% − 70% during the next 30 years. As a result, there will be continued pressure on inventory modifications to decrease energy use and carbon emissions.
Figures 6a-6c showed the probable emissions peak of prospective CO2 emissions in the household, government expenditure, and capital formation. The household sector is expected to peak at 19.7 Gt CO2. The estimated emission peaks are probably between − 2.6 and 25.7 Gt CO2 (Fig. 6a). In contrast, the maximum emission peak ranges for the government expenditure will be between − 16.0 and 20.0 Gt CO2 (Fig. 6b). However, the highest probable emission peak is 8.0 Gt CO2. Future CO2 emissions from the capital formation will be like those from the household division. The maximum emission peak of the capital formation ranges between − 25.4 Gt and 44.5 Gt CO2, with an average value of 17.85 Gt CO2. Therefore, the household sector and capital formation will continue to be the key contributors to the Asia and Pacific region's carbon emission peaks in the near prospect.
To summarize the Monte Carlo simulation findings, we find that dynamic scenario simulation of CO2 emissions peak is achievable. Therefore, the overall household consumption will exceed a peak of 131.64 Gt CO2 very soon. As for three other types of final demand, the government expenditure will possibly reach at highest 44.0 Gt CO2 by the next 30 years, while the capital formation will probably hit its highest emissions at 149.5 Gt CO2 at the exact times. Also, the change in inventory is likely to achieve its highest emissions at 3.6 Gt CO2. Thus, based on the initial findings, the household and capital formation sectors would be the primary contributors to the emission peaks. Despite several studies demonstrating the use of consumer-based accounting methods in investigating the causes of carbon emissions rise (Brizga et al., 2014; Wiedmann et al., 2015), few countries incorporate consumption-based indexes in their policy programs (Yu et al., 2010; Barrett et al., 2013).