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Parcelling virtual carbon in the pollution haven hypothesis

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  • López, Luis Antonio
  • Arce, Guadalupe
  • Zafrilla, Jorge Enrique

Abstract

The methodology proposed in this paper allows us to parcel the pollution haven hypothesis (PHH) into a bi-regional input–output framework to analyse whether the specialisation of countries in different stages of production and/or in final goods trading generates an increase or a decrease in global emissions as a consequence of international trade. We apply the model to the Spain–China trade relationship as it existed in 2005, finding a PHH of 29,667 KtCO2. If this trade had not existed (so each country had met its demand for intermediate and final goods), global emissions would have been reduced by these 29,667 KtCO2. Of this PHH, 43.5% corresponds to imports of final goods; 32.4% is related to imports of intermediate goods for the last stage of production; the remainder, 24.1%, is caused by global value chains (GVC) between the countries. Only 3229 KtCO2 of PHH emissions are linked to domestic emissions from the sector in which the imports are produced; the rest is explained by domestic linkages or successive rounds of domestic production, which supports the existence of an indirect PHH. Together with a trade growth in the last years, the fall of trade barriers would have implied a transformation of global production chains that have boosted global emissions.

Suggested Citation

  • López, Luis Antonio & Arce, Guadalupe & Zafrilla, Jorge Enrique, 2013. "Parcelling virtual carbon in the pollution haven hypothesis," Energy Economics, Elsevier, vol. 39(C), pages 177-186.
  • Handle: RePEc:eee:eneeco:v:39:y:2013:i:c:p:177-186 DOI: 10.1016/j.eneco.2013.05.006
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    Cited by:

    1. Rensfeldt, Arvid & Pariyawong, Vorapat & Fujii, Hidemichi, 2015. "Corporate environmental management and GHG emissions changes: Empirical study of multinational automobile companies," MPRA Paper 66264, University Library of Munich, Germany.
    2. Duan, Yuwan & Jiang, Xuemei, 2017. "Temporal Change of China's Pollution Terms of Trade and its Determinants," Ecological Economics, Elsevier, vol. 132(C), pages 31-44.
    3. Zhang, Zengkai & Guo, Ju'e & Hewings, Geoffrey J.D., 2014. "The effects of direct trade within China on regional and national CO2 emissions," Energy Economics, Elsevier, pages 161-175.
    4. Xia, Yan & Fan, Ying & Yang, Cuihong, 2015. "Assessing the impact of foreign content in China’s exports on the carbon outsourcing hypothesis," Applied Energy, Elsevier, pages 296-307.
    5. Monsalve, Fabio & Zafrilla, Jorge Enrique & Cadarso, María-Ángeles, 2016. "Where have all the funds gone? Multiregional input-output analysis of the European Agricultural Fund for Rural Development," Ecological Economics, Elsevier, vol. 129(C), pages 62-71.
    6. repec:eee:eneeco:v:64:y:2017:i:c:p:13-23 is not listed on IDEAS
    7. Arce, Guadalupe & López, Luis Antonio & Guan, Dabo, 2016. "Carbon emissions embodied in international trade: The post-China era," Applied Energy, Elsevier, pages 1063-1072.

    More about this item

    Keywords

    Pollution haven hypothesis; Global value chain; Input–output; Spain‐China trade;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • 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
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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