Global value chain, trade and carbon: Case of information and communication technology manufacturing sector

a r t i c l e i n f o Keywords: Slicing up the value chain Carbon dioxide emissions International fragmentation of production Information and communication technology This paper investigates the slicing up the value chain and the accompanied carbon dioxide emissions linked to the international trade of global information and communication technology (ICT) manufacturing sector, the most dynamic and globally dispersed sector in the world economy. Based on an inter-country input–output database WIOD, we trace the changes of value-added and the carbon dioxide emissions that are embodied in the international trade of ICT final products in 1995–2008. The results show that the emerging economies are largely benefited by involving in global ICT productions, for which advanced economies have always been major consumers and importers. Although the emerging economies experienced much faster upgrades in carbon-intensity-related technologies, in 2008 the advanced economies still emitted less carbon dioxide and obtained more added value than emerging economies, for identical amount of exports of ICT final products. Introduction In recent years, two interrelated important phenomena in international trade have attracted a great deal of interests by researchers, policy makers and general public. The first one is the slicing up the value chain, where the production processes are sliced into many stages in different locations, including different countries 1. As a result, the international trade is increasingly dominated by the trade in parts and components. It then has been argued explicitly that standard trade statistics on final products do not give accurate information anymore about the actual value which a country adds in the global production process, especially for a country which has to import a large amount of intermediate inputs to assemble its exports, such as China. Instead of traditional trade statistics , the domestic value-added contents (DVA) in global trade have gradually become a focus not only for academia (see, e.g. governmental agencies and international organizations, such as WTO, OECD and UNCTAD 2. The second phenomenon is the carbon dioxide emission embodied in international trade. Carbon emission embodied in international trade has been extensively measured since it causes a geographic separation between the carbon content of goods consumed in a country and the carbon emitted by a country in the production of goods (see, e.g. for example, estimated that total CO 2 emissions embodied in global international trade have increased from 4.3 Gt CO 2 in 1990 (20% of global CO 2 …