Assessing the Global Environmental Benefits of Global-Value-Chain Integration Through the Lens of Embodied Carbon: An Empirical Study Based on the Trading of Intermediate Goods

Peirui Wu and Haining Chen ()
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Peirui Wu: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Haining Chen: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China

Sustainability, 2025, vol. 17, issue 4, 1-20

Abstract: While the core objective of the Paris Agreement is to limit the increase in global average temperature (GAT) to 2 °C in the 21st century and to work towards limiting it to 1.5 °C, globalization and the configuration of production processes around global value chains (GVCs) have emerged as key factors explaining the recent evolution of environmental and economic indicators. In this context, this paper takes trade-implied carbon emissions as the entry point of the problem, uses MRIO to calculate the production-side and consumption-side carbon emissions, measures the forward and backward production lengths of GVCs according to the WWYZ method, and then constructs an econometric regression model to empirically analyze the environmental effects of GVC embeddedness. The results of the study show that, firstly, the forward and backward production length of GVCs is positively correlated with the production-side and consumption-side carbon emissions. Forward production length has a greater impact on carbon emissions on the production side, and backward production length has a greater impact on carbon emissions on the consumption side. Secondly, compared with developed countries, the length of forward and backward production has a more pronounced positive impact on carbon emissions in developing countries. Thirdly, as the global production chain continues to extend, the scale effect, structural effect, technological effect, and environmental regulation effect will all contribute to carbon emissions. Accordingly, countries or regions should continuously optimize production layout and processes to reduce the length of the production chain, realize lean manufacturing through automation and intelligence, and then move up the global value chain to play a role in carbon emission reduction through structural upgrading, technological progress, and environmental regulation.

Keywords: trade-implied carbon; production length; global value chain; trading of intermediate goods (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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