International Trade and Global Greenhouse Gas Emissions: Could Shifting the Location of Production Bring GHG benefits?

This report analyzes the greenhouse gas (GHG) emissions embodied in international trade and explores whether shifting production to lower-intensity regions could reduce global emissions. Using MRIO models and IEA data, the authors find significant variations in GHG intensity for products like clothing (up to a factor of five) and steel. Specifically, Brazil and Turkey are highlighted as low-intensity steel producers due to their energy mixes and technologies. While shifting production to regions with better access to low-GHG energy (such as the Americas for steel) offers potential benefits, the report notes that implementing trade policies to steer these flows is complicated by WTO laws and administrative challenges.

• Emissions embodied in international trade increased significantly between 1990 and 2008, rising from 4.3 Gt CO2 (20% of global emissions) to 7.8 Gt CO2 (28% of global CO2).
• A substantial portion of emissions embodied in trade flows from developing to industrialized nations. In 2004, the largest inter-regional flows were from China to North America (553 Mt CO2e) and China to Europe (488 Mt CO2e), followed by Other Asia to Europe (347 Mt CO2e) and Other Asia to North America (290 Mt CO2e).
• There is wide variation in the GHG intensity of producing consumer goods across different countries. For clothing, the ratio between the 80th and 20th percentile of GHG intensity is over five, while for vehicles and electronics, it is approximately two.
• Steel production GHG intensity varies by country, ranging from nearly 3 t CO2e/t to less than 1 t CO2e/t. Brazil and Turkey are among the lowest GHG-intensity producers among the top 10 steel-producing countries.
• The low GHG intensity of steel in Brazil is primarily due to its low-GHG energy (45 kg CO2/GJ), resulting from a high reliance on hydropower and the use of charcoal instead of coke for iron making. Turkey's low intensity is largely due to low energy intensity driven by the use of electric arc furnaces and scrap steel.
• Shifting global steel production to regions with greater access to low-GHG biomass (for charcoal-based production) or natural gas and low-GHG electricity (for electric arc furnaces) could reduce global GHGs. The Americas (North and South) are identified as scoring well on these metrics.
• Policy measures to shift trade flows toward lower-GHG production face significant challenges regarding WTO legality, administrative complexity, and political feasibility. Measures that differentiate based on climate action may be viewed as discriminatory, and identifying the carbon content of complex final products like cars is administratively difficult.
• One proposed mechanism to address embodied emissions that may be WTO-legal is to return revenues from border carbon adjustments to exporting countries as climate finance.

APA

-1, Erickson, P., van Asselt, H., Kemp-Benedict, E., & Lazarus, M. (2013). International Trade and Global Greenhouse Gas Emissions: Could Shifting the Location of Production Bring GHG benefits? Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-3c-2013-pr-trade-ghg-lr.pdf

Chicago

-1, Peter Erickson, Harro van Asselt, Eric Kemp-Benedict, and Michael Lazarus. International Trade and Global Greenhouse Gas Emissions: Could Shifting the Location of Production Bring GHG benefits? Stockholm Environment Institute, 2013. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-3c-2013-pr-trade-ghg-lr.pdf.

Wikipedia

{{cite report |last1=-1 |last2=Erickson |first2=Peter |last3=van Asselt |first3=Harro |last4=Kemp-Benedict |first4=Eric |last5=Lazarus |first5=Michael |title=International Trade and Global Greenhouse Gas Emissions: Could Shifting the Location of Production Bring GHG benefits? |publisher=Stockholm Environment Institute |date=2013 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/sei-3c-2013-pr-trade-ghg-lr.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{12013international, author = {-1 and Erickson, Peter and van Asselt, Harro and Kemp-Benedict, Eric and Lazarus, Michael}, title = {{International Trade and Global Greenhouse Gas Emissions: Could Shifting the Location of Production Bring GHG benefits?}}, institution = {Stockholm Environment Institute}, year = {2013}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/sei-3c-2013-pr-trade-ghg-lr.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }