Unequal Energy Footprints: Trade-Driven Asymmetries in Consumption-Based Carbon Emissions of the U.S. and China

Muhammad Yousaf Malik () and Hassan Daud Butt
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Muhammad Yousaf Malik: Accounting and Finance Department, School of Business, MacEwan University, Edmonton, AB T5J 2P2, Canada
Hassan Daud Butt: Bahria University, Islamabad 44000, Pakistan

Energies, 2025, vol. 18, issue 13, 1-31

Abstract: This study examines the symmetric and asymmetric impacts of international trade on consumption-based carbon emissions (CBEs) in the People’s Republic of China (PRC) and the United States of America (USA) from 1990 to 2018. The analysis uses autoregressive distributed lag (ARDL) and non-linear ARDL (NARDL) methodologies to capture short- and long-run trade emissions dynamics, with economic growth, oil prices, financial development and industry value addition as control variables. The findings reveal that exports reduce CBEs, while imports increase them, across both economies in the long and short run. The asymmetric analysis highlights that a fall in exports increases CBEs in the USA but reduces them in the PRC due to differences in supply chain flexibility. The PRC demonstrates larger coefficients for trade variables, reflecting its reliance on energy-intensive imports and rapid trade growth. The error correction term shows that the PRC takes 2.64 times longer than the USA to return to equilibrium after short-run shocks, reflecting systemic rigidity. These findings challenge the Environmental Kuznets Curve (EKC) hypothesis, showing that economic growth intensifies CBEs. Robustness checks confirm the results, highlighting the need for tailored policies, including carbon border adjustments, renewable energy integration and CBE-based accounting frameworks.

Keywords: consumption-based carbon emissions; global trade dynamics; United States of America; People’s Republic of China; non-linear autoregressive distributed lag (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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