Carbon Leakage, Consumption, and Trade

Grubb, Michael; Jordan, Nino David; Hertwich, Edgar G.; Neuhoff, Karsten; Das, Kasturi; Bandyopadhyay, Kaushik Ranjan; Asselt, Harro van; Sato, Misato; Wang, Ranran; Pizer, Billy; Oh, Hyungna

doi:10.1146/annurev-environ-120820-053625

Cited by 70 publications

(21 citation statements)

References 126 publications

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“…TP by saving capital) in favor of domestic GHG emission reductions while contributing to the GHG emissions of foreign nations. This can be validated by the higher carbon leakage of developed nations than developing nations ( 46 , 47 ).…”

Section: Resultsmentioning

confidence: 92%

Double-edged sword of technological progress to climate change depends on positioning in global value chains

Liang,

Zhong,

Zhou

et al. 2023

PNAS Nexus

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Technological progress (TP) is a double-edged sword to global climate change. This study for the first time reveals rebound and mitigation effects of efficiency-related TP in global value chains (GVCs) on greenhouse gas (GHG) emissions. The integrated effects of TP depend on the positioning of sectors in GVCs. The cost-saving TP in upstream sectors would stimulate downstream demand. This produces stronger rebound effects than mitigation potentials and leads to global GHG emission increments (e.g. TP in the gas sector of China and petroleum and coal products sector of South Korea). In contrast, sectors located in the trailing end of GVCs have greater potentials for GHG emission mitigation through TP, mainly due to the reduction of upstream inputs. (e.g. the construction sector of China and dwelling sector of the United States). Global GHG emissions and production outputs can be either a trade-off or a win–win relationship on account of TP than rebound effects, because TP in different sectors could possibly increase or decrease the emission intensity of GVCs. This study could recognize the most productive spots for GHG emission mitigation through efficiency-related TP. It provides a new perspective for international cooperation to promote global GHG emission mitigation.

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Section: Resultsmentioning

confidence: 92%

Double-edged sword of technological progress to climate change depends on positioning in global value chains

Liang,

Zhong,

Zhou

et al. 2023

PNAS Nexus

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“…Studies have estimated the extent of the out-sourcing phenomenon on the basis of regressions (solely) accounting for country-specific factors such as GDP and energy efficiency 8 – 12 —and invoking assumptions often leading to contradictory policy recommendations 13 – 16 . Other authors have attempted to understand to what extent a ‘consumption principle’ may help reducing disparities in carbon accounting 17 , 18 : in such studies, the amount of traded carbon is estimated via Multi-Regional Input-Output (MRIO) tables 19 , 20 that, however, are very sensitive to the accuracy of the available data on trading sectors 21 , 22 .…”

Section: Introductionmentioning

confidence: 99%

Tracing two decades of carbon emissions using a network approach

Guidi,

Mastrandrea,

Facchini

et al. 2024

Sci Rep

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According to the guidelines of the Intergovernmental Panel on Climate Change, carbon emissions are attributed to the producers of goods and services. This approach has been challenged by recent literature, advocating an attribution criterion based on consumers, i.e. accounting for the carbon embedded into the goods imported by each country. Quantifying the effectiveness of such a consumption-based accounting requires understanding the complex structure of the graph induced by the flows of emissions between world countries. To this aim, we have considered a balanced panel of a hundred of countries and constructed the corresponding Carbon Trade Network for each of the past twenty years. Our analysis highlights the tendency of each country to behave either as a ‘net producer’—or ‘net exporter’—of emissions or as a ‘net consumer’—or ‘net importer’—of emissions; besides, it reveals the presence of an unexpected, positive feedback: despite individual exchanges having become less carbon-intensive, the increasing trade activity has ultimately risen the amount of emissions directed from ‘net exporters’ towards ‘net importers’. Adopting a consumption-aware accounting would re-distribute responsibility between these two groups, possibly reducing disparities.

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“…Economic entities are inclined to move product line from areas with stringent emission regulations to those with mild or no regulations. 63 ETS in China has not widely encountered this situation just because power plant is difficult to move and carbon cost can’t flow along the value chain due to electricity price control from government. As more sectors are included in ETS, carbon leakage will become an essential problem.…”

Section: Resultsmentioning

confidence: 99%