Product level embodied carbon flows in bilateral trade

a r t i c l e i n f o As increasingly complex modelling approaches to quantifying embodied carbon in trade have become popular, the lack of disaggregation has been identified as a key weakness. This paper quantifies embodied carbon in bilateral trade at the product level. This is done using the material balance approach, by collecting product carbon intensity factors from multiple data sources and combining with bilateral trade data in physical quantities. The dataset covers trades between 195 countries for 1080 products in 2006. The detailed mapping of trade embodied carbon provides detailed insights into the nature of the flows that were previously masked or under-reported. For example, it finds that the lion's share of global trade embodied emissions are concentrated in a relatively small number of product categories of traded goods, suggesting that focusing mitigation efforts and trade-measures on these products would be an effective strategy to address potential carbon leakage, and to decarbonise international supply chains. The results also highlight that embodied carbon is focused in regional trade, thus regional harmonisation of climate mitigation policy will be effective in mitigating leakage. The industrial sectors currently account for around a third of global energy demand and CO 2 emissions (IEA, 2007). Decarbonising industrial production and consumption is therefore critical in achieving long term GHG stabilisation goals. However, in contrast to sectors such as transport , power generation and buildings, the geographic mobility of production facilities adds a layer of complexity to the issue of controlling industry sector emissions. On one hand, the possibility to decouple production and consumption via international trade can facilitate carbon mitigation within production chains. Reducing emissions from the global aluminium sector , for example, could benefit from concentrating the electricity intensive primary aluminium smelting segment of the production chain in locations with ample zero-carbon power generation capacity such as hydro. On the other hand, trade also provides industries the opportunity to strategically choose production locations to avoid stringent environmental regulations. As countries introduce climate policy measures of varying stringency and global merchandise trade continues to grow, 1 there are increasing concerns about the impact on production, investments and carbon leakage. A large number of studies have quantified embodied emissions in trade (EET), using several different methodologies, as reviewed by a number of papers (e.g. Most studies use an input–output framework to capture indirect effects, either within a single region context (e.g. Alternative …