The CO2 emission effects of global supply chain geographic restructuring on emerging economies

Abstract

Global supply chains (GSCs) have undergone profound geographic restructuring, and the emerging economies have played an increasingly important role. A better understanding of the CO₂ emission effects of GSC restructuring is essential for emerging economies to address the increasing complexity in emissions mitigation. To this end, we assess the emission effects of GSC geographic restructuring in both intermediates sourcing and final production on 204 emerging economies during 2010–2019. With the multi-regional input-output model and structural decomposition analysis technique, this study reveals that GSC geographic restructuring significantly raised emerging economies' emissions, with the relocation of intermediates sourcing and final production respectively contributing by 2695.9 Mt. and 1622.2 Mt. In particular, China, Southeast and Central Asia and Sub-Saharan Africa saw a greater emissions growth from the GSC production relocation but South Asia from the GSC sourcing relocation. On the contrary, GSC relatively shifting away from Latin America, Middle East and North Africa led to obvious emission reductions. Regional heterogeneities in the sectoral sources and technology effect of GSC emissions have further been identified. The empirical results can inform policymaking for emissions mitigation in the emerging economies during their integration into GSCs.