IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v149y2025ics0140988325006000.html

Supply chain decoupling in green products: A granular input-output analysis

Author

Listed:
  • Attinasi, M.-G.
  • Boeckelmann, L.
  • de Castro Martins, B.
  • Meunier, B.
  • Borin, A.
  • Conteduca, F.P.
  • Mancini, M.

Abstract

This paper develops a novel methodology to enhance the granularity of Inter-Country Input-Output (ICIO) tables, addressing well-known distortions caused by sectoral aggregation –distortions that are particularly pronounced for products with low substitutability, such as those essential to the green transition. Using this framework, we construct a disaggregated ICIO table that single out 129 products essential to the energy transition into eight green sectors, including electric batteries, vehicles, rare earths, and renewable energy equipment. We simulate East-West supply chain decoupling in green products through a multi-country, multi-sector trade model calibrated with such disaggregated ICIO table. Results reveal substantial economic costs: welfare losses reach 3 % and trade between blocs contracts by 20 %, even when accounting for trade diversion through neutral countries. We also quantify how green supply chain fragmentation increases greenhouse gas emissions intensities, showing that trade barriers on clean-energy sectors create dual risks, undermining both economic efficiency and climate objectives.

Suggested Citation

  • Attinasi, M.-G. & Boeckelmann, L. & de Castro Martins, B. & Meunier, B. & Borin, A. & Conteduca, F.P. & Mancini, M., 2025. "Supply chain decoupling in green products: A granular input-output analysis," Energy Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325006000
    DOI: 10.1016/j.eneco.2025.108773
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325006000
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2025.108773?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fontagné, Lionel & Guimbard, Houssein & Orefice, Gianluca, 2022. "Tariff-based product-level trade elasticities," Journal of International Economics, Elsevier, vol. 137(C).
    2. Bickenbach, Frank & Dohse, Dirk & Langhammer, Rolf J. & Liu, Wan-Hsin, 2024. "Foul play? On the scale and scope of industrial subsidies in China," Kiel Policy Briefs 173, Kiel Institute for the World Economy.
    3. Andres Rodriguez-Clare & Mauricio Ulate & Jose P. Vasquez, 2020. "New-Keynesian Trade: Understanding the Employment and Welfare Effects of Trade Shocks," Working Papers 265, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Weber, Pierre-François & Afota, Amandine & Boeckelmann, Lukas & De Gaye, Annabelle & Dieppe, Alistair & Faubert, Violaine & Grieco, Fabio & Le Roux, Julien & Meunier, Baptiste & Munteanu, Bogdan & Nob, 2025. "The intersection between climate transition policies and geoeconomic fragmentation," Occasional Paper Series 366, European Central Bank.
    5. Taylor, John B, 1980. "Aggregate Dynamics and Staggered Contracts," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 1-23, February.
    6. Rodolfo G. Campos & Benedikt Heid & Jacopo Timini, 2024. "The economic consequences of geopolitical fragmentation: Evidence from the Cold War," Papers 2404.03508, arXiv.org.
    7. Caldara, Dario & Iacoviello, Matteo & Molligo, Patrick & Prestipino, Andrea & Raffo, Andrea, 2020. "The economic effects of trade policy uncertainty," Journal of Monetary Economics, Elsevier, vol. 109(C), pages 38-59.
    8. Vasco M. Carvalho, 2014. "From Micro to Macro via Production Networks," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 23-48, Fall.
    9. Jonas Bunsen & Matthias Finkbeiner, 2022. "An Introductory Review of Input-Output Analysis in Sustainability Sciences Including Potential Implications of Aggregation," Sustainability, MDPI, vol. 15(1), pages 1-24, December.
    10. Sharda, S. & Garikapati, V.M. & Goulias, K.G. & Reyna, J.L. & Sun, B. & Spurlock, C.A. & Needell, Z., 2024. "The electric vehicles-solar photovoltaics Nexus: Driving cross-sectoral adoption of sustainable technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    11. Daron Acemoglu & Vasco M. Carvalho & Asuman Ozdaglar & Alireza Tahbaz‐Salehi, 2012. "The Network Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 80(5), pages 1977-2016, September.
    12. Pasten, Ernesto & Schoenle, Raphael & Weber, Michael, 2020. "The propagation of monetary policy shocks in a heterogeneous production economy," Journal of Monetary Economics, Elsevier, vol. 116(C), pages 1-22.
    13. Mancheri, Nabeel A., 2015. "World trade in rare earths, Chinese export restrictions, and implications," Resources Policy, Elsevier, vol. 46(P2), pages 262-271.
    14. Mr. Shekhar Aiyar & Mr. Jiaqian Chen & Mr. Christian H Ebeke & Mr. Roberto Garcia-Saltos & Tryggvi Gudmundsson & Ms. Anna Ilyina & Mr. Alvar Kangur & Tansaya Kunaratskul & Mr. Sergio L. Rodriguez & Mi, 2023. "Geoeconomic Fragmentation and the Future of Multilateralism," IMF Staff Discussion Notes 2023/001, International Monetary Fund.
    15. Thibault Fally & James Sayre, 2018. "Commodity Trade Matters," 2018 Meeting Papers 172, Society for Economic Dynamics.
    16. Bernhard Michel & Caroline Hambÿe & Bart Hertveldt, 2018. "The Role of Exporters and Domestic Producers in GVCs: Evidence for Belgium based on Extended National Supply-and-Use Tables Integrated into a Global Multiregional Input-Output Table," NBER Working Papers 25155, National Bureau of Economic Research, Inc.
    17. Rüdiger Bachmann & David Baqaee & Christian Bayer & Moritz Kuhn & Andreas Löschel & Benjamin Moll & Andreas Peichl & Karen Pittel & Moritz Schularick, 2022. "What if? The economic effects for Germany of a stop of energy imports from Russia," Sciences Po Economics Publications (main) hal-03881469, HAL.
    18. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    19. Dai, Ziyi & Rodgers, Michael O & Guensler, Randall, 2023. "Hybrid EV and Pure BEV Owners: A Comparative Analysis of Household Demographics, Travel Behavior, and Energy Use," Institute of Transportation Studies, Working Paper Series qt5w91q6bc, Institute of Transportation Studies, UC Davis.
    20. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    21. Harald Fadinger & Christian Ghiglino & Mariya Teteryatnikova, 2015. "Income Differences and Input-Output Structure," Vienna Economics Papers vie1510, University of Vienna, Department of Economics.
    22. Raffaele Giammetti, 2020. "Tariffs, domestic import substitution and trade diversion in input-output production networks: an exercise on Brexit," Economic Systems Research, Taylor & Francis Journals, vol. 32(3), pages 318-350, July.
    23. Massari, Stefania & Ruberti, Marcello, 2013. "Rare earth elements as critical raw materials: Focus on international markets and future strategies," Resources Policy, Elsevier, vol. 38(1), pages 36-43.
    24. Aaron Flaaen & Fariha Kamal & Eunhee Lee & Kei-Mu Yi, 2024. "Aggregation Bias in the Measurement of US Global Value Chains," AEA Papers and Proceedings, American Economic Association, vol. 114, pages 136-142, May.
    25. Antrà s, Pol & Chor, Davin, 2017. "On the Measurement of Upstreamness and Downstreamness in Global Value Chains," CEPR Discussion Papers 12549, C.E.P.R. Discussion Papers.
    26. Kjartan Steen-Olsen & Anne Owen & Edgar G. Hertwich & Manfred Lenzen, 2014. "Effects Of Sector Aggregation On Co 2 Multipliers In Multiregional Input-Output Analyses," Economic Systems Research, Taylor & Francis Journals, vol. 26(3), pages 284-302, September.
    27. Carlos G'oes & Eddy Bekkers, 2022. "The Impact of Geopolitical Conflicts on Trade, Growth, and Innovation," Papers 2203.12173, arXiv.org, revised Jan 2023.
    28. David Rezza Baqaee & Emmanuel Farhi, 2024. "Networks, Barriers, and Trade," Econometrica, Econometric Society, vol. 92(2), pages 505-541, March.
    29. den Besten, Tamar & Di Casola, Paola & Habib, Maurizio Michael, 2023. "Geopolitical fragmentation risks and international currencies," The international role of the euro - Special feature, European Central Bank.
    30. Lorenzo Bruno Prataviera & Davide Bosio & Ioannis Koliousis, 2024. "Can we increase the granularity in understanding global value chains? An integration of academic and practice perspectives to enhance future developments," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 31(1), pages 62-90.
    31. Przemyslaw Kowalski & Clarisse Legendre, 2023. "Raw materials critical for the green transition: Production, international trade and export restrictions," OECD Trade Policy Papers 269, OECD Publishing.
    32. De Backer, Koen & Miroudot, Sébastien, 2014. "Mapping global value chains," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37176.
    33. Norihiko Yamano & Michel Lioussis & Agnès Cimper, 2024. "Measuring greenhouse gas footprints in global production networks: New perspectives on emissions embodied in production chains and final demand patterns," OECD Science, Technology and Industry Working Papers 2024/12, OECD Publishing.
    34. Zhu, Kunfu & Guo, Xuefan & Zhang, Zengkai, 2022. "Reevaluation of the carbon emissions embodied in global value chains based on an inter-country input-output model with multinational enterprises," Applied Energy, Elsevier, vol. 307(C).
    35. Campos, Rodolfo G. & Estefania-Flores, Julia & Furceri, Davide & Timini, Jacopo, 2023. "Geopolitical fragmentation and trade," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1289-1315.
    36. Kirsten S. Wiebe & Norihiko Yamano, 2016. "Estimating CO2 Emissions Embodied in Final Demand and Trade Using the OECD ICIO 2015: Methodology and Results," OECD Science, Technology and Industry Working Papers 2016/5, OECD Publishing.
    37. Hervé Le Bihan & Jérémi Montornès & Thomas Heckel, 2012. "Sticky Wages: Evidence from Quarterly Microeconomic Data," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 1-32, July.
    38. Beata Javorcik & Lucas Kitzmüller & Helena Schweiger & Muhammed A. Yıldırım, 2024. "Economic costs of friendshoring," The World Economy, Wiley Blackwell, vol. 47(7), pages 2871-2908, July.
    39. Antoine Berthou & Caroline Jardet & Daniele Siena & Urszula Szczerbowicz, 2018. "Costs and consequences of a trade war: a structural analysis," Rue de la Banque, Banque de France, issue 72, december.
    40. Yoshinori Morimoto, 1970. "On Aggregation Problems in Input-Output Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(1), pages 119-126.
    41. Maria‐Grazia Attinasi & Lukas Boeckelmann & Baptiste Meunier, 2025. "The economic costs of supply chain decoupling," The World Economy, Wiley Blackwell, vol. 48(3), pages 598-627, March.
    42. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    43. Gopinath, Gita & Gourinchas, Pierre-Olivier & Presbitero, Andrea F. & Topalova, Petia, 2025. "Changing global linkages: A new Cold War?," Journal of International Economics, Elsevier, vol. 153(C).
    44. Borin, Alessandro & Conteduca, Francesco Paolo & Di Stefano, Enrica & Gunnella, Vanessa & Mancini, Michele & Panon, Ludovic, 2023. "Trade decoupling from Russia," International Economics, Elsevier, vol. 175(C), pages 25-44.
    45. Peter Eppinger & Gabriel J. Felbermayr & Oliver Krebs & Bohdan Kukharskyy, 2021. "Decoupling Global Value Chains," CESifo Working Paper Series 9079, CESifo.
    46. Marijn A. Bolhuis & Mr. Jiaqian Chen & Benjamin R Kett, 2023. "Fragmentation in Global Trade: Accounting for Commodities," IMF Working Papers 2023/073, International Monetary Fund.
    47. Francesco Paolo Conteduca & Michele Mancini & Giacomo Romanini & Simona Giglioli & Alessandro Borin & Maria Grazia Attinasi & Lukas Boeckelmann & Baptiste Meunier, 2025. "Fragmentation and the future of GVCs," Questioni di Economia e Finanza (Occasional Papers) 932, Bank of Italy, Economic Research and International Relations Area.
    48. Jie Cai & Nan Li & Ana Maria Santacreu, 2022. "Knowledge Diffusion, Trade, and Innovation across Countries and Sectors," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 104-145, January.
    49. Gaaitzen de Vries & Quanrun Chen & Rana Hasan & Zhigang Li, 2019. "Do Asian Countries Upgrade in Global Value Chains? A Novel Approach and Empirical Evidence," Asian Economic Journal, East Asian Economic Association, vol. 33(1), pages 13-37, March.
    50. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
    51. Christoph E. Boehm & Andrei A. Levchenko & Nitya Pandalai-Nayar, 2023. "The Long and Short (Run) of Trade Elasticities," American Economic Review, American Economic Association, vol. 113(4), pages 861-905, April.
    52. Sáenz, Luis Felipe, 2022. "Time-varying capital intensities and the hump-shaped evolution of economic activity in manufacturing," Journal of Macroeconomics, Elsevier, vol. 73(C).
    53. Mr. Tamim Bayoumi & Jelle Barkema & Mr. Diego A. Cerdeiro, 2019. "The Inflexible Structure of Global Supply Chains," IMF Working Papers 2019/193, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aguilar, Pablo & Darracq Pariès, Matthieu & Jouvanceau, Valentin & Meunier, Baptiste & Spital, Tajda, 2026. "Global implications of export controls on rare earths: a model-based assessment," Occasional Paper Series 384, European Central Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ludovic Panon & Laura Lebastard & Michele Mancini & Alessandro Borin & Peonare Caka & Gianmarco Cariola & Dennis Essers & Elena Gentili & Andrea Linarello & Tullia Padellini & Francisco Requena & Jaco, 2024. "Inputs in Distress: Geoeconomic Fragmentation and Firms’ Sourcing," Working Papers 2436, Banco de España.
    2. Giammetti, Raffaele & Wirkierman, Ariel L., 2025. "Global production scenarios: Actual unbundling, potential rebundling and geoeconomic rewiring across value chains," International Economics, Elsevier, vol. 183(C).
    3. Borin, Alessandro & Conteduca, Francesco Paolo & Di Stefano, Enrica & Gunnella, Vanessa & Mancini, Michele & Panon, Ludovic, 2023. "Trade decoupling from Russia," International Economics, Elsevier, vol. 175(C), pages 25-44.
    4. Francesco Paolo Conteduca & Simona Giglioli & Claire Giordano & Michele Mancini & Ludovic Panon, 2025. "Trade fragmentation unveiled: five facts on the reconfiguration of global, US and EU trade," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(3), pages 535-557, September.
    5. Baur, Andreas & Dorn, Florian & Flach, Lisandra & Fuest, Clemens, 2025. "Geoeconomic fragmentation and the role of non-aligned countries," Economics Letters, Elsevier, vol. 255(C).
    6. Kreuter, Helena & Riccaboni, Massimo, 2023. "The impact of import tariffs on GDP and consumer welfare: A production network approach," Economic Modelling, Elsevier, vol. 126(C).
    7. Jésus Fernández-Villaverde & Tomohide Mineyama & Dongho Song & Jesús Fernández-Villaverde, 2024. "Are We Fragmented Yet? Measuring Geopolitical Fragmentation and Its Causal Effects," CESifo Working Paper Series 11192, CESifo.
    8. Erik Braun & Emese Braun & András Gyimesi & Zita Iloskics & Tamás Sebestyén, 2023. "Exposure to trade disruptions in case of the Russia–Ukraine conflict: A product network approach," The World Economy, Wiley Blackwell, vol. 46(10), pages 2950-2982, October.
    9. Norring, Anni, 2024. "The economic effects of geoeconomic fragmentation," BOFIT Policy Briefs 8/2024, Bank of Finland Institute for Emerging Economies (BOFIT).
    10. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, . "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2).
    11. Gopinath, Gita & Gourinchas, Pierre-Olivier & Presbitero, Andrea F. & Topalova, Petia, 2025. "Changing global linkages: A new Cold War?," Journal of International Economics, Elsevier, vol. 153(C).
    12. David Rezza Baqaee & Emmanuel Farhi, 2024. "Networks, Barriers, and Trade," Econometrica, Econometric Society, vol. 92(2), pages 505-541, March.
    13. Nickel, Christiane & Kilponen, Juha & Moral-Benito, Enrique & Koester, Gerrit & Ciccarelli, Matteo & Enders, Almira & Holton, Sarah & Landau, Bettina & Venditti, Fabrizio & Bobeica, Elena & Brand, Cla, 2025. "A strategic view on the economic and inflation environment in the euro area," Occasional Paper Series 371, European Central Bank.
    14. Raffaele Giammetti & Luca Papi & Désirée Teobaldelli & Davide Ticchi, 2020. "The Italian value chain in the pandemic: the input–output impact of Covid-19 lockdown," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(3), pages 483-497, September.
    15. Pol Antràs & Davin Chor, 2021. "Global Value Chains," NBER Working Papers 28549, National Bureau of Economic Research, Inc.
    16. Chen, Renjing & Jin, Chenxin & Jin, Wei & Sheng, Bin & Wang, Guanxiang, 2025. "Geopolitics along the value chains," China Economic Review, Elsevier, vol. 90(C).
    17. Weber, Pierre-François & Afota, Amandine & Boeckelmann, Lukas & De Gaye, Annabelle & Dieppe, Alistair & Faubert, Violaine & Grieco, Fabio & Le Roux, Julien & Meunier, Baptiste & Munteanu, Bogdan & Nob, 2025. "The intersection between climate transition policies and geoeconomic fragmentation," Occasional Paper Series 366, European Central Bank.
    18. Boeckelmann, Lukas & Martins, Bernardo De Castro & Meunier, Baptiste & Borin, Alessandro & Conteduca, Francesco Paolo & Mancini, Michele & Attinasi, Maria Grazia, 2026. "Green supply chains at risk: measuring the true economic and environmental costs," Research Bulletin, European Central Bank, vol. 141.
    19. Charles Serfaty & Sebastian Stumpner, 2026. "Geoeconomic Fragmentation in a Multi-Country GVC Model," Working papers 1030, Banque de France.
    20. Rita Cappariello & Sebastian Franco-Bedoya & Vanessa Gunnella & Gianmarco I. P. Ottaviano, 2020. "Rising protectionism and global value chains: quantifying the general equilibrium effects," CEP Discussion Papers dp1682, Centre for Economic Performance, LSE.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325006000. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.