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Emissions burden shifting in global value chains – winners and losers under multi-regional versus bilateral accounting

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  • María-Ángeles Cadarso
  • Fabio Monsalve
  • Guadalupe Arce

Abstract

International trade leads to emissions burden shifting and threatens mitigation targets. Multiregional input–output (MRIO) and bilateral trade input–output (BTIO) models are widely used to analyse emissions embodied in trade and global value chains. Especially, the last one is used in analysing border tax adjustment (BTA) on the carbon content of imports. The model choice is not trivial. The analysis shows BTIO's inability to capture the consumer-principle throughout the production chain and its inadequacy as an option for consumption-based accounting, because it allocates emissions to the first importing country and to the sector of production, instead to the consumer (both country and region). Regarding the BTA assessment, BTIO tax domestic carbon content of direct imports, but not indirect imported carbon content. MRIO does provide incentives for mitigation in third countries. The differences in allocation of emissions and taxes’ burden of both models have different consequences for developed and undeveloped regions.

Suggested Citation

  • María-Ángeles Cadarso & Fabio Monsalve & Guadalupe Arce, 2018. "Emissions burden shifting in global value chains – winners and losers under multi-regional versus bilateral accounting," Economic Systems Research, Taylor & Francis Journals, vol. 30(4), pages 439-461, October.
  • Handle: RePEc:taf:ecsysr:v:30:y:2018:i:4:p:439-461
    DOI: 10.1080/09535314.2018.1431768
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    Cited by:

    1. Li, Xiaoyu & Zeng, Zhao & Zhang, Zengkai & Yao, Ye & Du, Huibin, 2023. "The rising North-South carbon flows within China from 2012 to 2017," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 263-272.
    2. Adrian Foong & Prajal Pradhan & Oliver Frör & Jürgen P. Kropp, 2022. "Adjusting agricultural emissions for trade matters for climate change mitigation," Nature Communications, Nature, vol. 13(1), pages 1-10, December.
    3. Ali, Tariq & Xie, Wei & Zhu, Anfeng, 2020. "A Global Value Chain Analysis of Chinas Virtual Water Footprint Through Agricultural Trade," Conference papers 333175, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. López, Luis Antonio & Arce, Guadalupe & Jiang, Xuemei, 2020. "Mapping China's flows of emissions in the world's carbon footprint: A network approach of production layers," Energy Economics, Elsevier, vol. 87(C).
    5. Ma, Ning & Sun, WenLi & Li, Huajiao & Zhou, Xing & Sun, Yihua & Ren, Bo, 2023. "Industrial linkage of global carbon emissions: A heterogeneous ownership perspective," Energy Policy, Elsevier, vol. 172(C).
    6. Ma, Ning & Sun, Wenli & Wang, Ze & Li, HuaJiao & Ma, Xintong & Sun, Haocheng, 2023. "The effects of different forms of FDI on the carbon emissions of multinational enterprises: A complex network approach," Energy Policy, Elsevier, vol. 181(C).

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