2024/17 LEM Working Paper Series

Decarbonisation and Specialisation Downgrading: the double harm of GVC Integration

Giovanni DOsi, Federico Riccio and Maria Enrica Virgillito
  Keywords
 
Structural Change, CO2 Emissions, Global Value Chains


  JEL Classifications
 
F18, L16, O14
  Abstract
 
This work assesses the double harm of Global Value Chain (GVC) integration. Firstly, we take a within-country structural change perspective and investigate how the internal structure of country production, and thus the ensuing emission profile, evolves across development phases. Assessing the structural change-emissions nexus is necessary to understand how to reconcile growth and sustainable development. Secondly, we look at the cross-country dimension, embracing how the changing geography of production affects the environment. We find evidence that the relocation of production toward developing countries via GVCs has negatively impacted worldwide emissions and document that GVCs are progressively becoming a carrier of industrial and ecological downgrading for developing countries.
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