Impact of the International Trade on the EU Clothing Industry Carbon Emissions

Abstract

Globalization and international trade has strongly affected world’s economy in the recent decades. The importance of emissions loads distribution between countries participating in the supply chains is steadily growing. In the highly fragmented global supply chain structure, with the consumption and production separated geographically and politically, it is difficult to capture the distribution of carbon emission burden within the global production processes. Several recent scientific studies have emphasized that CO2 emissions embodied in international trade processes should be addressed. The CO2 emissions up to now are mostly evaluated on the base of domestic emission accounts. To address this research gap, our study applies multi-regional input-output (MRIO) method for the estimation of the CO2 emissions embodied in the EU clothing imports. The study evaluates carbon emissions of the EU clothing imports and provides suggestions for companies and policy makers. Our results show, that the EU has not reduced CO2 emissions but instead has outsourced them. MRIO and triangulation methods were used to evaluate the EU clothing sector embodied carbon emissions in imports from 2000 to 2016. CO2 emission reduction goal can be achieved by implementing the proposed consumption based emission accounting framework additionally to the country’s emission inventory. Our results may help businesses and policy makers to establish more efficient strategies towards the EU’s carbon emissions.