Slowing down of globalization and global CO2 emissions – A causal or casual association?

Abstract

In recent years we have witnessed slowdowns of both globalization and global CO2 emissions. Not only have Organization for Economic Co-operation and Development (OECD) economies, such as the US and the UK, tried to bring manufacturing back to their home countries but non-OECD economies, such as China and India, have also increased their shares of domestic products at both intermediate and final goods. In this paper, we employ the annual global multi-regional input–output tables compiled by the Asian Development Bank to explore the linkage of the recent slowdown in globalization and global CO2 emissions for the period 2012–2016. Our results suggest that there are indeed some clues indicating a slowdown of globalization in several leading OECD and non-OECD economies. However, the changes of consumption in non-OECD economies are much larger than are those in OECD economies. At the aggregate level, the effects of globalization on emissions have been dominated by non-OECD economies (in particular China and India), showing a negative linkage. More specifically, the changing pattern of globalization has contributed a net increase of 202 Mt. in global CO2 emissions. The recent slowdown of global CO2 emissions cannot, in general, be attributed to the slowdown of globalization.