Carbon fueling complex global value chains tripled in the period 1995–2012

Abstract

11Complex global value chains are those involving more than two countries and imply that a country 12 imports products as capital goods or intermediate inputs to the production of its exports. When tracing 13 the life-cycle greenhouse gas (GHG) emissions of traded products, for example for border carbon 14 adjustments, such emissions are counted at each border crossing. The prevalence and dynamics of this 15 phenomenon have been poorly understood. This paper shows that GHG emissions associated with the 16 production of imports used for producing exports have risen rapidly from 1995, peaking in 2012 and 17 declining slightly to 2016. They now constitute a total of 4.4 PgCO 2 equ. or 10% of global emissions. The 18 most important exported products in terms of emissions associated with imported inputs are chemicals, 19vehicles, machinery, and information and communications technology (ICT). Crude petroleum, iron and 20 steel, chemicals, and ICT components are the imported products being used for this export production. 21A driver analysis indicates that in industrialized countries, the declining domestic value added in exports 22 and increasing share of exports in GDP have contributed most to this development, while in emerging 23 economies, the growth of GDP itself has been an important driving factor, while declines in the energy 24 intensity of export production have provided a weak counterbalance. The importance of transiting 25 carbon raises questions of how climate policies affect industrial competitiveness and how border tax 26 adjustment would account for such emissions. 27 28 2 Keywords: Emissions embodied in trade; carbon footprint; multiregional input-output analysis; 29 EXIOBASE; trade in value added (TiVA); index decomposition; complex global value chains. 30 31

Mexico's 20 years of North American Free Trade Agreement: Socio-Environmental Trends and Unequal Exchange

“…Our findings agree that new sources of carbon in Mexico are due to reprocessing for exports within which were ICT equipment, iron and steel, electrical machinery, motor vehicles and parts, and rubber and plastic products [13].…”

“…The suitability of EE-MRIO to determine unequal land flows has been questioned arguing the limitations to discern the extent to which land exports are contingent on energy, fossil fuels or even land imports from low-income regions [19]. While it is plausible that land exports from USA-CAN to Mexico are contingent on prior energy or other resource, this lies beyond this study and arguably beyond the power of high-level EE-MRIO analysis [13], [19].…”

“…Previous analyses argue that land flows are contingent on imported resources, but this is not clear from highlevel tier EORA analysis [19]. Moreover, recent studies show that all Canadian carbon imports to Mexico and half of USA are just intermediate inputs, to be reprocessed and shipped back to their original sources embodied in finished products [13]. The same might be true for land, except that USA and CAN are particularly abundant in land and forests, which might also partly explain the results [20].…”

“…Trade with the United States and Canada has tripled since NAFTA's signing in 1994 [1]. The Export share of Mexico's GDP went from 30 to 49% since 1995 [13]. For Mexico, this has meant a diversification away from oil and agriculture and a growth from the aero-spatial, machinery, electronics and automotive industries [7].…”

“…Naturally, there is some variations across EE-MRIOs at country and product level [13]. A recent study based on Exiobase reports 81 Mt of CO2 -and not 74 Mt-flowing MEX to USA, and 6 Mt -not 4Mt-from MEX to CAN [13].…”