National energy and carbon footprints: an environmentally extended input-output approach

In the past decades, high-income countries have started to offshore energy-intensive manufacturing chains, focusing on activities with high value added. Meanwhile, the rapid acceleration of the industrialization process in states like China, India and Brazil allowed these emerging economies to win a large share of the global market by the means of an intensive and unprecedented manufacturing production. International supply chains caused the displacement of entire industrial sectors towards lower-income countries, and thus environmental and social impacts relocated as well. Energy use and emissions associated with each productive step are strictly related to the technology and energy mix of the country where it takes place: the industry sector in low-income nations tends to be less environmentally regulated, and this may result in a rise of global impacts. In this scenario, the energy use of a country estimated within its borders only cannot be considered an exhaustive indicator, as countries may be improving their environmental performance by importing energy-intensive goods from abroad. Although not physically exchanged, energy use, together with carbon emissions, can be considered embodied in global trade. Environmentally extended global multi-regional input-output analysis is the method used to account for international trade-related impacts from a consumption perspective. This technique allows to track energy use and CO2 emissions of global supply chains and allocate them to final consumers. This approach is known as consumption-based accounting or footprinting. This analysis involved 43 countries and an aggregate representing the rest of the world, over the period 2000-2014. Energy and carbon footprints showed that the traditional production-based perspective underestimates the energy use and carbon emissions that can be attributed to most of the high-income countries while developing economies turned out to be more virtuous. On average, the energy embodied in international trade corresponds to ~1/3 of the energy footprint of a country and even more for carbon emissions. Around 22% of global energy use and carbon emissions are embodied in international trade. The main embodied energy and carbon flows between countries are made explicit, revealing a complex network of trade-related impact displacement.