The decomposition of carbon productivity under the context of international trade

Abstract

Noting the rising importance of international trade in global warming, this study proposes a new decomposition of carbon productivity by dividing it into the part of true carbon productivity (consumption-based labor productivity and population-sustaining power of CO${}_2$) and the part with zero-sum nature (labor exploitation, carbon emission exploitation and trade surplus). By analyzing 66 countries/regions and the rest of the world in 2018, we find that by excluding the exploitation part, the differences in carbon productivity among countries – particularly between developed and developing countries – narrow. Analysis for selected economies (EU15, EU13, the United States, Japan, China and India) from 1995 to 2018 reveals that international exploitation of labor and carbon emissions has deepened from 1995 to 2006, and weakened from 2006 to 2018, but the structure of exploitation has been maintained through the entire period; the consumption-based labor productivity and population-sustaining power of CO${}_2$ effects are the principal driving factors of change in carbon productivity. The growth in true carbon productivity increased in the last half of the period, but the improvement is still quite modest.