International trade and the geographical separation between income and enabled carbon emissions

In this paper we study how international trade allows the geographical separation between the place where carbon emissions occur and the place where income from those emissions is derived. We do so by studying the carbon emissions enabled by the primary inputs of products downstream along the production chain. We find that 18% of global carbon emissions are enabled abroad and that Developed Economies, Fossil Fuel Exporters and Asia account for 80% of the downstream emissions enabled by international trade. Both Developed Economies and Fossil Fuel Exporters exhibit a positive trade balance of enabled emissions while for Asia the opposite is true. Developed Economies and Fossil Fuel Exporters enable emissions mainly through the export of manufactured products (690Mt) and fossil fuels (684Mt), respectively, while Asia exhibits an outflow of enabled emissions through the import of fossil fuels (209Mt). The measurement of enabled emissions allows the understanding of how a region's income is derived from carbon emissions occurring abroad.