Industrial linkage of global carbon emissions: A heterogeneous ownership perspective

Abstract

The roles of multinational enterprises (MNEs) and domestically owned agents in global carbon emissions differ significantly. Industrial linkage analysis of carbon emissions can be applied to identify critical sectors and their contributions where policies need to be improved for this purpose. This study investigates the industrial linkage of domestically owned agents and MNEs in global carbon emissions during the 2005–2016 period from both the demand and supply side via a multiregional input-output method. Industrial linkages are analyzed from the perspectives of both production and spatial linkage. The results show that the forward linkages of domestic agents on the supply side mainly lead to an increase in global carbon emissions. Second, the spatial linkage is more influential than the production linkage in global carbon emissions in most cases. Global carbon emissions are spatially lock-in some specific regions, such as China and South Africa. Third, MNEs transfer energy-intensive industries to developing regions and cause carbon leakage. We highlight that spatial linkage has an important role in global carbon emissions. This study is beneficial for policy-makers in providing a reference for impartially allocating mitigation responsibility.