Parcelling virtual carbon in the pollution haven hypothesis
2013
Lopez, Luis Antonio | Arce, Guadalupe | Zafrilla, Jorge Enrique
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.
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