AnalysisInternational trade and the geographical separation between income and enabled carbon emissions

- We report the logical downstream counterpart of the conventional carbon footprints.
- These are the carbon emissions enabled through supply of factors of production.
- Developed Economies, Fossil Fuel Exporters and Asia contribute to 80% of the emissions traded.
- Developed Economies and Fossil Fuel Exporters are net importers of these emissions.
- This means that these regions' income is dependent on emissions generated elsewhere.

In this paper we study how international trade allows the geographical separation between the place where carbon emissions occur and the place where income from those emissions is derived. We do so by studying the carbon emissions enabled by the primary inputs of products downstream along the production chain. We find that 18% of global carbon emissions are enabled abroad and that Developed Economies, Fossil Fuel Exporters and Asia account for 80% of the downstream emissions enabled by international trade. Both Developed Economies and Fossil Fuel Exporters exhibit a positive trade balance of enabled emissions while for Asia the opposite is true. Developed Economies and Fossil Fuel Exporters enable emissions mainly through the export of manufactured products (690 Mt) and fossil fuels (684 Mt), respectively, while Asia exhibits an outflow of enabled emissions through the import of fossil fuels (209 Mt). The measurement of enabled emissions allows the understanding of how a region's income is derived from carbon emissions occurring abroad.