What Accounts for the Growth of Carbon Dioxide Emissions in Advanced and Emerging Economies? The Role of Consumption, Technology and Global Supply Chain Participation

Abstract

This paper examines the driving forces behind the growth in carbon dioxide emissions in forty advanced and emerging economies between 1995 and 2008. We use the global supply chain concept introduced in Timmer et al. (2014) to measure CO2 emissions in internationally fragmented production networks and embed the concept in structural decomposition analysis. Our findings suggest that rising levels of domestic consumption are related to increased carbon dioxide emissions in both advanced and emerging economies. A substantial share of CO2 emissions growth in emerging economies is accounted for by increased participation in global supply chains. However, even for countries that rapidly integrated in global production networks, such as China, rising domestic consumption accounts for the majority of territorial emissions.