Network causal effects of deepening global trade agreements on embodied carbon emissions

Abstract

With the deepening vertical specialization of production networks and value chains among countries, the problem of global embodied carbon emission leakage under multilateral trade agreement cooperation is becoming increasingly prominent. This study measures the index of “World Trade Organization+" and “World Trade Organization-X,” finds the complex impact of the two types of deep integration of trade agreements on embodied carbon emissions from the network perspective, and compares them to draw conclusions and suggestions. First, the global trade-embodied carbon transfer link spontaneously diversifies, with most countries moving from the network's perimeter to its center. Second, more trade agreements can help carbon-absorbing, and carbon-spillover countries narrow the “production side” and “consumption side” divide. Third, “World Trade Organization+" and “World Trade Organization-X" deep integration influence embodied carbon emission linkages differently for countries with different embodied carbon emission attributes, with “World Trade Organization-X" having a more significant impact. At the policy level, free trade agreements have deepened to a certain extent to provide a consistent and synergistic path for trade governance and climate globalization. Countries should actively introduce relevant provisions based on the governance of trade-embodied carbon emission reductions in “World Trade Organization+" and “World Trade Organization-X", especially in “World Trade Organization-X", and some of the relevant policy provisions can be appropriately weighted in favor of developing countries.