UNDERSTANDING THE CARBON INTENSITY OF SOUTH KOREA’S EXPORTS: A MULTIPLICATIVE STRUCTURAL DECOMPOSITION ANALYSIS

Tae-Jin Kim () and Nikolas Tromp
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Tae-Jin Kim: Division of International Trade and Economics, National Korea Maritime and Ocean University, 727 Taejong-ro, Yeongdo-Gu, Busan, 49112, South Korea
Nikolas Tromp: Department of Economics and Finance, Keimyung University, 1095 Dalgubeol-Daero, Dalseo-Gu, Daegu 42601, Republic of Korea

Climate Change Economics (CCE), 2024, vol. 15, issue 03, 1-26

Abstract: Despite the large and growing role of exports in Korea’s carbon emissions, they have been largely overlooked in Korea’s carbon neutrality strategy. With this in mind, we analyze Korea’s aggregate emission intensity of exports (AEIE), an indicator of the environmental efficiency of exports, which decreased from 1.37Kt/$M to 0.74Kt/$M during 2000–2014. Using the multi-regional input-output model and two-stage multiplicative structural decomposition analysis (MSDA), we uncover drivers of changes in the AEIE. Analysis of bilateral AEIE shows that exports to developed countries had a large impact on the decline while exports to developing countries have risen in importance. MSDA shows that the carbon intensity effect contributed most to the decline but that trade in intermediate goods and trade in final goods were also important. At the sectoral level, manufacturers of basic metals, electricity, gas, steam and air conditioning supply and transportation sectors were shown to be important drivers of the decline in the AEIE. As the first study to analyze the drivers of Korea’s AEIE, this paper suggests various abatement policies to help achieve the goal of carbon neutrality by 2050.

Keywords: Embodied carbon emissions; multi-regional input–output; South Korea; carbon intensity; multiplicative structural decomposition analysis; value-added trade (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S2010007823500239

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