Towards economic value-added growth without carbon emission embodied growth in North–North trade—An empirical analysis of US-German trade
2022
Li, Rongrong | Ge, Shuting
Nationally determined contributions were at the core of the Paris Agreement for the global response to climate change. However, with the geographical separation of production and consumption caused by international trade, traditional trade statistics can no longer accurately reflect the flows of economic value and carbon emissions between countries, which will affect the participation and implementation of global climate policies. Based on a multi-regional input–output model, we measured the embodied carbon flows of bilateral trade between developed countries represented by Germany and the US, discussed the decoupling relationship between embodied carbon and export-led growth, and finally used structural decomposition analysis (SDA) to show how the driving factors affect embodied carbon flow in German-US trade. We found that from 2000 to 2014, embodied carbon in German-US trade showed an overall downward trend. While Germany maintained a trade surplus with the US, it also maintained an embodied carbon surplus. In addition, embodied carbon and value added in Germany’s exports to the US were mostly strongly decoupled, while in US exports to Germany were mostly weakly decoupled, and the two-way decoupling had been weakened in the later stage. The results of SDA showed that changes in carbon intensity clearly inhibited bilateral carbon flows, while trade scale effects promoted it. This study provided an opportunity to use trade to achieve carbon reduction and increased the possibility of providing a convenient and feasible market mechanism for emission reduction through international partnerships.
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