Abstract
International outsourcing is a growing phenomenon in manufacturing industries due to the limited resources and the economic benefits of this phenomenon. Although international outsourcing seems to be a cost efficient way of production, the concerns about its CO2 emissions are rising dramatically. In this research, the impacts of international outsourcing on the CO2 emissions of all industries have been quantified. Input output analysis and linear programming have been implemented by programming in the Matlab as the research methodology. Australian manufacturing industry (outsourcer) and Chinese manufacturing industry (outsourcee) and their main suppliers that emit high CO2 levels were selected as a case study. The results of this study depict that international outsourcing of Australian manufacturing industry will reduce not only the CO2 emissions of that industry but also the CO2 emissions of the other domestic industries in Australia. In contrast, this international outsourcing will increase the CO2 emissions of both China and the other countries’ industries. This will lead to the growth of global CO2 emissions. In the worst case scenario, if the Australian manufacturing industry shuts down all its production, China and other countries CO2 emissions will increase 4.88% and 0.05% respectively. On this occasion, global CO2 emissions will increase by 0.82%. This paper presents a decision support system that will be useful for policy makers to evaluate the effect of different international outsourcing scenarios on CO2 emissions before making any real outsourcing decisions.
Highlights
The consumption of imported resources and products is expanding among societies in OECD and EU countries (Falk & Wolfmayr, 2008; Kissinger & Rees, 2010; Bhatti et al, 2011)
This study extended the current research on international outsourcing and environmental sustainability by undertaking a comprehensive analysis of the significant effect of international outsourcing on the CO2 emissions of Australia, China and the other countries
The baseline international outsourcing scenario and ten new scenarios have been investigated in this research
Summary
The consumption of imported resources and products is expanding among societies in OECD and EU countries (Falk & Wolfmayr, 2008; Kissinger & Rees, 2010; Bhatti et al, 2011) This is due to the international outsourcing phenomenon that represents the departure abroad of the products or services of a firm or industry that previously produced within the country (Jones, 2005). Environmental sustainability is defined as stakeholder behaviour impacting on the natural environment that meets the needs of the present without compromising the ability of future stakeholders to meet their own needs (Elliot, 2011). For achieving such sustainable environment, a number of scholars focused on the current CO2 emissions embodied in exporting and importing at the firm and industry levels (Wiedmann, 2009; Li & Hewitt, 2008; Shui & Harriss, 2006; Kara et al, 2010; Muñoz & Steininger, 2010; Chen et al, 2011; Su & Ang, 2010; Moosavi Rad et al, 2013)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
