CO2 emissions flow due to international trade: multi-regional input–output approach for Spain

Abstract

As a result of globalization and free trade agreements, international trade is enormously growing and putting more pressure on the environment over the last few decades. This has drawn the attention of both environmental system analysts and economists in response to the ever-growing concerns over climate change and the urgent need for global action for its mitigation. This work aims at analysing the implication of international trade in terms of CO2 responsibility between Spain and its important trading partners using a multi-regional input–output approach based on the data from Organisation for Economic Co-operation and Development and World Input–Output Database. The empirical results show that Spain is a net importer of CO2 emissions, equivalent to 29% of its emissions due to domestic production. The CO2 emissions embodied in the trade with China take the largest share and this is mainly due to the importation of energy-intensive products from China. When analysed by the end-use type, intermediate goods contribute the largest portion, which is about 67% of the total emissions associated with imported goods. Products such as motor vehicles, chemicals, a variety of machineries and equipment, textile and leather products, and construction materials are the key imports responsible for the major portion of CO2 emissions. Being at its peak in 2005, the construction sector is the most responsible activity behind both domestic and imported emissions.