Supply chain decoupling in green products: a granular input-output analysis

Maria Grazia Attinasi, Lukas Boeckelmann, Bernardo De Castro Martins, Baptiste Meunier, Alessandro Borin, Francesco Conteduca and Michele Mancini

Working Paper Series from European Central Bank

Abstract: This paper introduces a novel methodology to enhance the granularity of Inter-Country Input-Output (ICIO) tables. While our general methodology can be applied to any products of interest, we show that the well-documented distortions caused by sectoral aggregation in ICIO tables are particularly pronounced for products with a low substitutability, such as those essential to the green transition (e.g. electric batteries, rare earths). We therefore apply our framework to construct a disaggregated ICIO table that singles out 129 products essential to the energy transition. We then simulate a hypothetical scenario of an East-West supply chain decoupling in green products through a multi-country multi-sector model calibrated with our tailored disaggregated ICIO table. Results reveal substantial economic costs: welfare losses reach 3% and trade between blocs contracts by 20%, even when accounting for trade diversion through neutral countries. We finally quantify how the green supply chain decoupling increases the intensities of greenhouse gas emissions, highlighting how trade barriers on green sectors affect both economic efficiency and climate objectives. JEL Classification: C67, F13, F18, F51, Q48

Keywords: decoupling; global trade; global value chains; green transition; sectoral granularity (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-ene
Note: 930374
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp.3152~82f3522654.en.pdf (application/pdf)

Related works:
Journal Article: Supply chain decoupling in green products: A granular input-output analysis (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20250

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().