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

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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
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    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

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