11/15
TUE
10:00-11:15
| Title | Tracing GHG Emissions in Global Value Chains: A new horizon in a post-Paris world |
|---|---|
| Contents | Our panel focuses on the impact of international trade on climate change. A better understanding of the relationship between greenhouse gases (GHGs) emissions and global value chains (GVCs) is crucial for both environmental communities and trade. Concerning this issue, panelists will present their policy-oriented views about how multinationals and local enterprises can be climate and environment-friendly involved and engaged in GVCs from country, industrial, firm and household perspectives. Also, we would like to address how developing countries can move forward to implement their National Determined Contributions (NDCs) while securing trade competitiveness in the context of GVCs. Policy recommendations for governments, industry as well as international organizations to address challenges will be also discussed. |
| Organiser / Co-organiser |
Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO) |
| Programme |
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| Session Summary |
The rise of global value chain (GVC) has dramatically changed the nature and structure of international trade in recent decades. Our GVC based new accounting framework decomposes both gross exports and emissions from production and consumption perspectives by GVC routes. This enables us to clearly identify the country-sector level pure-self responsibility of emissions, production and consumption-based emissions as well as emission transfers simultaneously. Our empirical results show that pure-self responsibility based emissions in developing economies increase rapidly due to their economic growth. At the same time, we find emissions transfers among developing countries due to GVC participation also increase rapidly and these transfers have been the major source of emission transfers in the global production system. A large proportion of China's export growth has been via use of intermediate inputs supplied by other countries. This type of activity has been characterized as hub-and-spoke, where China is the hub and the suppliers and final markets are the spokes. Recently an analytical method has been developed to quantify such hub-and-spoke activities. Using a newly augmented Chinese input–output table in which information about firm ownership and size are explicitly reported, we show for the first time that SMEs contributed more than half of China's CO2 emissions. Detailed supply-chain analyses further show that domestic final demands on products made by private SMEs and exports made by foreign-invested enterprises are the main drivers of the embodied CO2 emissions in China's exports. Using the household consumption database of the World Bank and household surveys in USA and China, we estimated household based carbon footprint by different income groups. The results illustrate that the footprint disparity between the rich and the poor becomes larger as income grows. After the adoption of the Paris Agreement, the border which distinguishes each responsibility of the Parties is fading out and industries, individual companies and consumers in developing and emerging countries will play a very important role. Besides public organizations, private stakeholders such as industries and investors incorporated in GVC have actually been becoming more aware and engaged in addressing climate change, building a non-hierarchical regime system. |
| Key Messages |
The increasing sophistication in cross country production sharing gives an impetus to emissions leakage since more and more cross-border emission transfers arise through trade in intermediate goods via GVCs. The importance of China in GVC and its significance as a global trade hub has been highlighted. However, indicators based on various inter-country input-output datasets should be improved to give better policy implications with less uncertainty. More attention should be paid to small and medium-sized enterprises (SMEs) in achieving CO2 emissions reduction target for China. A new effort of reducing global income inequality is needed and the principle of income equality and carbon equality should be concerned in applying the Paris Agreement. GVC based discussion on GHG emission should be more explored on the occasion of the Paris Agreement. |
| Materials | Event Flyer (PDF・196KB) |
| Photos | |
| Reporters | Keitaro Araki, Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO) |
