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Spatial-Temporal Variation and Driving Factors of Embodied Carbon in China-G7 Trade

China and G7 countries contribute 70% global GDP and 55% global carbon emissions. The carbon leakage between China and G7 is a crucial issue in achieving the synergetic emission abatement globally. The motivation of this study is to evaluate the embodied carbon transfer between China and G7 in the trade between 2000 and 2014, and investigate the driving factors that impact the embodied carbon trend. A multiregional input–output (MRIO) model based on the WIOD database is constructed, and a structural decomposition analysis (SDA) is employed. The results indicate that China plays the role of net exporter of embodied carbon in trade with G7, which mainly flows to the US (5825.67 Mt), Japan (3170.36 Mt) and Germany (1409.93 Mt). However, China’s embodied carbon exports to the G7 show an inverted U-shaped trend with a turning point after financial crisis, while the G7’s embodied carbon exports to China continue to rise. The conclusion is that to achieve the climate goal of carbon neutrality, it is not enough to rely solely on the low-carbon transition on the production side, the demand side should also be adjusted.