A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation

• International production fragmentation generates global emissions savings.
• In the absence of trade, global emissions would increase by 822.61 Mts in 2009.
• The final product trade becomes increasingly less environmentally effective.
• Traded intermediate products correspond to the largest share of embodied emissions.
• The share of emissions induced by global value chain is related to trade increases.

Pollution haven hypothesis is an important debate on the environmental effects of international trade, the pattern of which has been reshaped obviously by global production fragmentation recently. The production process is distributed globally, and the pollution haven effect of international trade is becoming more complicated. For instance, intermediate product trade corresponds to the largest share of embodied emissions, and the share of emissions induced by the global value chain related trade is increasing gradually. The aim of this paper is to make a comprehensive analysis on the pollution haven hypothesis in carbon emissions embodied in three different trade patterns from global, bilateral, and national perspectives. We propose a method to parcel the pollution haven hypothesis in a multi-regional input–output analysis and discuss the contribution of production fragmentation for global emissions. It is found that international production fragmentation generates global emissions savings. The intermediate product trade has a negative balance of avoided emissions. The final product trade becomes increasingly less environmentally effective during the period 1995–2009. There are significant differences in the environmental effects of different trade patterns for each country.