Can global value chain participation affect embodied carbon emission intensity

Abstract With the deepening of the global division of labor, it is significant to analyze the impact of global value chain participation on embodied carbon emission intensity. It provides implications for countries to address climate issues and improve development quality. The present work uses a multi-region input-output table provided by World Input Output Database to calculate the global value chain participation and the embodied carbon emission intensity of 42 different countries, for the period between 2000 and 2014. In addition, we decompose the carbon emission intensity into the carbon emission intensity embodied in domestic demand and foreign exports demand, and the carbon emission intensity of foreign exports demand is further divided into three types of embodied carbon emission intensity. Then, we analyze how global value chain participation affects the embodied carbon emission intensity, and examine different impacts across different development countries and different types of embodied carbon emission intensity. We also explore the different impacts under different embodied carbon emission intensity distributions. The results show that global value chain participation has a significantly negative impact on the embodied carbon emission intensity. Compared with the developed “north” countries, the global value chain participation of developing “south” countries have a larger negative impact of embodied carbon emission intensity. From the perspective of different types of demand, the impact of global value chain participation on carbon emission intensity embodied in foreign exports demand is greater than that embodied in domestic demand. The quantile regression results show that the global value chain participation at the high quantiles has a greater impact on the embodied carbon emission intensity, which indicates countries with higher embodied carbon emission intensity should participate in the global value chain to expand the production scale while reducing carbon emissions. These results provide relevant material and insights to countries about how their participation in the global production fragmentation affects their greenhouse gas emission profile, which can be used to elaborate structured political measures to address, at the same time, global market inclusion and climate change mitigation.