China, India outsource emissions, risking climate goal

A rising tide of industries moving operations from China and India to less-developed Asian countries undermines global targets to reduce climate-changing emissions, researchers said.

Many energy-intensive industries, including manufacturing and raw materials processing, are relocating to cheaper countries like Indonesia, Vietnam and Thailand, a study by Britain’s University of East Anglia (UEA) showed on Monday.

“The Chinese production system is starting to transform to be more higher value-added,” said Dabo Guan, professor of climate change economics at UEA and a co-author of the report.

“The price of labor in China has increased quite a lot,” he told the Thomson Reuters Foundation.

The shifts in production and trade will make it harder to meet the Paris Agreement goal of cutting emissions enough to keep the rise in global average temperatures to “well below” 2 degrees Celsius (3.6F) above pre-industrial times, Guan said.

Efforts by smaller developing nations have a growing role to play in staying below that limit - but it could be jeopardized by the new pattern of manufacturing, the report added.

It found that trade among developing nations - known as “South-South” trade - more than doubled between 2004 and 2011.