Global value chains for the Belt and Road countries: Two-thirds of CO2 emissions while one-third of the value added

Abstract

The Belt and Road Initiative (BRI) countries, comprising of the most dynamic emerging area of global CO₂ emissions as well economic growth, play growing roles in the Global Value Chains (GVCs). We provide an in-depth understanding of how participation in GVCs affects CO₂ emissions and economic gains in BRI countries by integrating GVCs theory with Environmental Expanded Input-output model. Results show that BRI countries were trapped into emissions-income dilemma with 2/3 of GVCs’ CO₂ emissions but only 1/3 of value added. 2/3 of BRI GVCs’ CO₂ emissions and value added were exported to developing countries, but the GVCs-related CO₂ intensities between BRI countries and developing countries were 20∼30 % higher than developed countries. The inadequate domestic industrial transformation is responsible for the negative decoupling of emissions and income in the major BRI emitters. The fragile Emissions-Income balance calls for a global cohesive cooperation framework for the low-carbon GVCs under BRI.