IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v64y2017icp13-23.html
   My bibliography  Save this article

A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation

Author

Listed:
  • Zhang, Zengkai
  • Zhu, Kunfu
  • Hewings, Geoffrey J.D.

Abstract

Pollution haven hypothesis is an important debate on the environmental effects of international trade, the pattern of which has been reshaped obviously by global production fragmentation recently. The production process is distributed globally, and the pollution haven effect of international trade is becoming more complicated. For instance, intermediate product trade corresponds to the largest share of embodied emissions, and the share of emissions induced by the global value chain related trade is increasing gradually. The aim of this paper is to make a comprehensive analysis on the pollution haven hypothesis in carbon emissions embodied in three different trade patterns from global, bilateral, and national perspectives. We propose a method to parcel the pollution haven hypothesis in a multi-regional input–output analysis and discuss the contribution of production fragmentation for global emissions. It is found that international production fragmentation generates global emissions savings. The intermediate product trade has a negative balance of avoided emissions. The final product trade becomes increasingly less environmentally effective during the period 1995–2009. There are significant differences in the environmental effects of different trade patterns for each country.

Suggested Citation

  • Zhang, Zengkai & Zhu, Kunfu & Hewings, Geoffrey J.D., 2017. "A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation," Energy Economics, Elsevier, vol. 64(C), pages 13-23.
    • Handle: RePEc:eee:eneeco:v:64:y:2017:i:c:p:13-23
    DOI: 10.1016/j.eneco.2017.03.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988317300737
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2017.03.007?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Tang, John P., 2015. "Pollution havens and the trade in toxic chemicals: Evidence from U.S. trade flows," Ecological Economics, Elsevier, vol. 112(C), pages 150-160.
    2. Thomas Wiedmann & Richard Wood & Jan Minx & Manfred Lenzen & Dabo Guan & Rocky Harris, 2010. "A Carbon Footprint Time Series Of The Uk - Results From A Multi-Region Input-Output Model," Economic Systems Research, Taylor & Francis Journals, vol. 22(1), pages 19-42.
    3. Judith M. Dean & Mary E. Lovely, 2010. "Trade Growth, Production Fragmentation, and China's Environment," NBER Chapters, in: China's Growing Role in World Trade, pages 429-469, National Bureau of Economic Research, Inc.
    4. Erik Dietzenbacher & Kakali Mukhopadhyay, 2007. "An Empirical Examination of the Pollution Haven Hypothesis for India: Towards a Green Leontief Paradox?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(4), pages 427-449, April.
    5. Alessandro Borin & Michele Mancini, 2015. "Follow the value added: bilateral gross export accounting," Temi di discussione (Economic working papers) 1026, Bank of Italy, Economic Research and International Relations Area.
    6. He, Jie, 2006. "Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces," Ecological Economics, Elsevier, vol. 60(1), pages 228-245, November.
    7. Sonia Ben Kheder & Natalia Zugravu, 2008. "The pollution haven hypothesis: a geographic economy model in a comparative study," Documents de travail du Centre d'Economie de la Sorbonne v08083, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    8. 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, vol. 150(C), pages 296-307.
    9. Tang, John P., 2015. "Pollution havens and the trade in toxic chemicals: Evidence from U.S. trade flows," Ecological Economics, Elsevier, vol. 112(C), pages 150-160.
    10. Chung, Hyun-Sik & Rhee, Hae-Chun, 2001. "A residual-free decomposition of the sources of carbon dioxide emissions: a case of the Korean industries," Energy, Elsevier, vol. 26(1), pages 15-30.
    11. Taylor M. Scott, 2005. "Unbundling the Pollution Haven Hypothesis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-28, June.
    12. Faye Duchin & Carlos López-Morales, 2012. "Do Water-Rich Regions Have A Comparative Advantage In Food Production? Improving The Representation Of Water For Agriculture In Economic Models," Economic Systems Research, Taylor & Francis Journals, vol. 24(4), pages 371-389, July.
    13. Zhu Liu & Steven J. Davis & Kuishuang Feng & Klaus Hubacek & Sai Liang & Laura Diaz Anadon & Bin Chen & Jingru Liu & Jinyue Yan & Dabo Guan, 2016. "Targeted opportunities to address the climate–trade dilemma in China," Nature Climate Change, Nature, vol. 6(2), pages 201-206, February.
    14. repec:clg:wpaper:2008-02 is not listed on IDEAS
    15. Fan, Ying & Xia, Yan, 2012. "Exploring energy consumption and demand in China," Energy, Elsevier, vol. 40(1), pages 23-30.
    16. Su, Bin & Ang, B.W., 2014. "Attribution of changes in the generalized Fisher index with application to embodied emission studies," Energy, Elsevier, vol. 69(C), pages 778-786.
    17. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    18. Chen, Z.M. & Chen, G.Q., 2011. "Embodied carbon dioxide emission at supra-national scale: A coalition analysis for G7, BRIC, and the rest of the world," Energy Policy, Elsevier, vol. 39(5), pages 2899-2909, May.
    19. Shui, Bin & Harriss, Robert C., 2006. "The role of CO2 embodiment in US-China trade," Energy Policy, Elsevier, vol. 34(18), pages 4063-4068, December.
    20. 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.
    21. Arto, Iñaki & Roca, Jordi & Serrano, Mònica, 2014. "Measuring emissions avoided by international trade: Accounting for price differences," Ecological Economics, Elsevier, vol. 97(C), pages 93-100.
    22. Astrid Kander & Magnus Jiborn & Daniel D. Moran & Thomas O. Wiedmann, 2015. "National greenhouse-gas accounting for effective climate policy on international trade," Nature Climate Change, Nature, vol. 5(5), pages 431-435, May.
    23. Ang, B.W. & Su, Bin & Wang, H., 2016. "A spatial–temporal decomposition approach to performance assessment in energy and emissions," Energy Economics, Elsevier, vol. 60(C), pages 112-121.
    24. Robert Hoffmann & Chew-Ging Lee & Bala Ramasamy & Matthew Yeung, 2005. "FDI and pollution: a granger causality test using panel data," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(3), pages 311-317.
    25. Guo, Jie & Zou, Le-Le & Wei, Yi-Ming, 2010. "Impact of inter-sectoral trade on national and global CO2 emissions: An empirical analysis of China and US," Energy Policy, Elsevier, vol. 38(3), pages 1389-1397, March.
    26. Rezza, Alief A., 2013. "FDI and pollution havens: Evidence from the Norwegian manufacturing sector," Ecological Economics, Elsevier, vol. 90(C), pages 140-149.
    27. Peters, Glen P., 2008. "From production-based to consumption-based national emission inventories," Ecological Economics, Elsevier, vol. 65(1), pages 13-23, March.
    28. Ackerman, Frank & Ishikawa, Masanobu & Suga, Mikio, 2007. "The carbon content of Japan-US trade," Energy Policy, Elsevier, vol. 35(9), pages 4455-4462, September.
    29. Anders Hammer Strømman & Edgar G. Hertwich & Faye Duchin, 2009. "Shifting Trade Patterns as a Means of Reducing Global Carbon Dioxide Emissions," Journal of Industrial Ecology, Yale University, vol. 13(1), pages 38-57, February.
    30. Zhi Wang & Shang-Jin Wei & Xinding Yu and Kunfu Zhu, 2017. "Characterizing Global and Regional Manufacturing Value Chains: Stable and Evolving Features," Development Working Papers 419, Centro Studi Luca d'Agliano, University of Milano.
    31. Su, Bin & Ang, B.W. & Low, Melissa, 2013. "Input–output analysis of CO2 emissions embodied in trade and the driving forces: Processing and normal exports," Ecological Economics, Elsevier, vol. 88(C), pages 119-125.
    32. Klaus Conrad, 2005. "Locational competition under environmental regulation when input prices and productivity differ," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(2), pages 273-295, June.
    33. Su, Bin & Thomson, Elspeth, 2016. "China's carbon emissions embodied in (normal and processing) exports and their driving forces, 2006–2012," Energy Economics, Elsevier, vol. 59(C), pages 414-422.
    34. Arkaitz Usubiaga & José Acosta-Fernández, 2015. "Carbon Emission Accounting In Mrio Models: The Territory Vs. The Residence Principle," Economic Systems Research, Taylor & Francis Journals, vol. 27(4), pages 458-477, December.
    35. Pei, Jiansuo & Meng, Bo & Wang, Fei & Xue, Jinjun, 2015. "Production sharing, demand spillovers and CO2 emissions : the case of Chinese regions in GVCs," IDE Discussion Papers 493, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    36. Tomasz Koźluk & Christina Timiliotis, 2016. "Do environmental policies affect global value chains?: A new perspective on the pollution haven hypothesis," OECD Economics Department Working Papers 1282, OECD Publishing.
    37. Matthew A. Cole & Robert J. R. Elliott, 2005. "FDI and the Capital Intensity of “Dirty” Sectors: A Missing Piece of the Pollution Haven Puzzle," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 530-548, November.
    38. Gavrilova, Olga & Vilu, Raivo, 2012. "Production-based and consumption-based national greenhouse gas inventories: An implication for Estonia," Ecological Economics, Elsevier, vol. 75(C), pages 161-173.
    39. Jiang, Xuemei & Guan, Dabo & Zhang, Jin & Zhu, Kunfu & Green, Christopher, 2015. "Firm ownership, China's export related emissions, and the responsibility issue," Energy Economics, Elsevier, vol. 51(C), pages 466-474.
    40. Arik Levinson & M. Scott Taylor, 2008. "Unmasking The Pollution Haven Effect," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 223-254, February.
    41. Serrano, Mònica & Dietzenbacher, Erik, 2010. "Responsibility and trade emission balances: An evaluation of approaches," Ecological Economics, Elsevier, vol. 69(11), pages 2224-2232, September.
    42. Ang, B.W & Zhang, F.Q & Choi, Ki-Hong, 1998. "Factorizing changes in energy and environmental indicators through decomposition," Energy, Elsevier, vol. 23(6), pages 489-495.
    43. Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor & Francis Journals, vol. 10(4), pages 307-324.
    44. Manfred Lenzen & Lise-Lotte Pade & Jesper Munksgaard, 2004. "CO2 Multipliers in Multi-region Input-Output Models," Economic Systems Research, Taylor & Francis Journals, vol. 16(4), pages 391-412.
    45. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    46. Ang, B. W. & Liu, F. L. & Chew, E. P., 2003. "Perfect decomposition techniques in energy and environmental analysis," Energy Policy, Elsevier, vol. 31(14), pages 1561-1566, November.
    47. Su, Bin & Ang, B.W., 2014. "Input–output analysis of CO2 emissions embodied in trade: A multi-region model for China," Applied Energy, Elsevier, vol. 114(C), pages 377-384.
    48. Jiang, Xuemei & Zhu, Kunfu & Green, Christopher, 2015. "China's energy saving potential from the perspective of energy efficiency advantages of foreign-invested enterprises," Energy Economics, Elsevier, vol. 49(C), pages 104-112.
    49. Dietzenbacher, Erik & Pei, Jiansuo & Yang, Cuihong, 2012. "Trade, production fragmentation, and China's carbon dioxide emissions," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 88-101.
    50. Bin Su & B. W. Ang, 2012. "Structural Decomposition Analysis Applied To Energy And Emissions: Aggregation Issues," Economic Systems Research, Taylor & Francis Journals, vol. 24(3), pages 299-317, March.
    51. Glen Peters & Robbie Andrew & James Lennox, 2011. "Constructing An Environmentally-Extended Multi-Regional Input-Output Table Using The Gtap Database," Economic Systems Research, Taylor & Francis Journals, vol. 23(2), pages 131-152.
    52. Al-mulali, Usama & Foon Tang, Chor, 2013. "Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries," Energy Policy, Elsevier, vol. 60(C), pages 813-819.
    53. Su, Bin & Ang, B.W., 2015. "Multiplicative decomposition of aggregate carbon intensity change using input–output analysis," Applied Energy, Elsevier, vol. 154(C), pages 13-20.
    54. Tan, Hao & Sun, Aijun & Lau, Henry, 2013. "CO2 embodiment in China–Australia trade: The drivers and implications," Energy Policy, Elsevier, vol. 61(C), pages 1212-1220.
    55. Su, Bin & Ang, B.W., 2012. "Structural decomposition analysis applied to energy and emissions: Some methodological developments," Energy Economics, Elsevier, vol. 34(1), pages 177-188.
    56. Zhi Wang & Shang-Jin Wei & Kunfu Zhu, 2013. "Quantifying International Production Sharing at the Bilateral and Sector Levels," NBER Working Papers 19677, National Bureau of Economic Research, Inc.
    57. Su, Bin & Ang, B.W., 2013. "Input–output analysis of CO2 emissions embodied in trade: Competitive versus non-competitive imports," Energy Policy, Elsevier, vol. 56(C), pages 83-87.
    58. Su, Bin & Ang, B.W., 2011. "Multi-region input–output analysis of CO2 emissions embodied in trade: The feedback effects," Ecological Economics, Elsevier, vol. 71(C), pages 42-53.
    59. 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, vol. 46(C), pages 161-175.
    60. Zhu Liu & Steven J. Davis & Kuishuang Feng & Klaus Hubacek & Sai Liang & Anadon, Laura Diaz & Bin Chen & Liu, Jingru & Yan, Jinyue & Dabo Guan, "undated". "Targeted opportunities to address the climate-trade dilemma in China," Working Paper 336456, Harvard University OpenScholar.
    61. Du, Huibin & Guo, Jianghong & Mao, Guozhu & Smith, Alexander M. & Wang, Xuxu & Wang, Yuan, 2011. "CO2 emissions embodied in China-US trade: Input-output analysis based on the emergy/dollar ratio," Energy Policy, Elsevier, vol. 39(10), pages 5980-5987, October.
    Full references (including those not matched with items on IDEAS)

    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. Feng, Tong & Du, Huibin & Zhang, Zengkai & Mi, Zhifu & Guan, Dabo & Zuo, Jian, 2020. "Carbon transfer within China: Insights from production fragmentation," Energy Economics, Elsevier, vol. 86(C).
    2. Yuhuan Zhao & Song Wang & Jiaqin Yang & Zhonghua Zhang & Ya Liu, 2016. "Input-output analysis of carbon emissions embodied in China-Japan trade," Applied Economics, Taylor & Francis Journals, vol. 48(16), pages 1515-1529, April.
    3. Wang, Zhenguo & Su, Bin & Xie, Rui & Long, Haiyu, 2020. "China’s aggregate embodied CO2 emission intensity from 2007 to 2012: A multi-region multiplicative structural decomposition analysis," Energy Economics, Elsevier, vol. 85(C).
    4. Su, Bin & Ang, B.W., 2014. "Attribution of changes in the generalized Fisher index with application to embodied emission studies," Energy, Elsevier, vol. 69(C), pages 778-786.
    5. 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, vol. 46(C), pages 161-175.
    6. Wang, H. & Ang, B.W. & Su, Bin, 2017. "Assessing drivers of economy-wide energy use and emissions: IDA versus SDA," Energy Policy, Elsevier, vol. 107(C), pages 585-599.
    7. Su, Bin & Ang, B.W., 2017. "Multiplicative structural decomposition analysis of aggregate embodied energy and emission intensities," Energy Economics, Elsevier, vol. 65(C), pages 137-147.
    8. Su, Bin & Thomson, Elspeth, 2016. "China's carbon emissions embodied in (normal and processing) exports and their driving forces, 2006–2012," Energy Economics, Elsevier, vol. 59(C), pages 414-422.
    9. 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.
    10. Zhang, Zhonghua & Zhao, Yuhuan & Su, Bin & Zhang, Yongfeng & Wang, Song & Liu, Ya & Li, Hao, 2017. "Embodied carbon in China’s foreign trade: An online SCI-E and SSCI based literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 492-510.
    11. Fozia Latif Gill & K Kuperan Viswanathan & Mohd Zaini Abdul Karim, 2018. "The Critical Review of the Pollution Haven Hypothesis (PHH)," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 167-174.
    12. Boya Zhang & Shukuan Bai & Yadong Ning & Tao Ding & Yan Zhang, 2020. "Emission Embodied in International Trade and Its Responsibility from the Perspective of Global Value Chain: Progress, Trends, and Challenges," Sustainability, MDPI, vol. 12(8), pages 1-26, April.
    13. Su, Bin & Ang, B.W. & Li, Yingzhu, 2019. "Structural path and decomposition analysis of aggregate embodied energy and emission intensities," Energy Economics, Elsevier, vol. 83(C), pages 345-360.
    14. Arce, Guadalupe & López, Luis Antonio & Guan, Dabo, 2016. "Carbon emissions embodied in international trade: The post-China era," Applied Energy, Elsevier, vol. 184(C), pages 1063-1072.
    15. Su, Bin & Ang, B.W. & Low, Melissa, 2013. "Input–output analysis of CO2 emissions embodied in trade and the driving forces: Processing and normal exports," Ecological Economics, Elsevier, vol. 88(C), pages 119-125.
    16. Zhu, Bangzhu & Su, Bin & Li, Yingzhu & Ng, Tsan Sheng, 2020. "Embodied energy and intensity in China’s (normal and processing) exports and their driving forces, 2005-2015," Energy Economics, Elsevier, vol. 91(C).
    17. Zhong, Zhangqi & Jiang, Lei & Zhou, Peng, 2018. "Transnational transfer of carbon emissions embodied in trade: Characteristics and determinants from a spatial perspective," Energy, Elsevier, vol. 147(C), pages 858-875.
    18. Zhang, Youguo & Tang, Zhipeng, 2015. "Driving factors of carbon embodied in China's provincial exports," Energy Economics, Elsevier, vol. 51(C), pages 445-454.
    19. Wang, H. & Ang, B.W. & Su, Bin, 2017. "A Multi-region Structural Decomposition Analysis of Global CO2 Emission Intensity," Ecological Economics, Elsevier, vol. 142(C), pages 163-176.
    20. Qi, Tianyu & Winchester, Niven & Karplus, Valerie J. & Zhang, Xiliang, 2014. "Will economic restructuring in China reduce trade-embodied CO2 emissions?," Energy Economics, Elsevier, vol. 42(C), pages 204-212.

    More about this item

    Keywords

    Pollution haven hypothesis; Production fragmentation; Input–output analysis;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • 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:64:y:2017:i:c:p:13-23. 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.