The rise of South\u2013South trade and its effect on global CO2 emissions

Abstract

Economic globalization and concomitant growth in international trade since the late 1990s have profoundly reorganized global production activities and related CO2 emissions. Here we show trade among developing nations (i.e., South–South trade) has more than doubled between 2004 and 2011, which reflects a new phase of globalization. Some production activities are relocating from China and India to other developing countries, particularly raw materials and intermediate goods production in energy-intensive sectors. In turn, the growth of CO2 emissions embodied in Chinese exports has slowed or reversed, while the emissions embodied in exports from less-developed regions such as Vietnam and Bangladesh have surged. Although China’s emissions may be peaking, ever more complex supply chains are distributing energy-intensive industries and their CO2 emissions throughout the global South. This trend may seriously undermine international efforts to reduce global emissions that increasingly rely on rallying voluntary contributions of more, smaller, and less-developed nations.