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Journal of Economic Surveys

EMBODIED CARBON IN TRADE: A SURVEY OF THE EMPIRICAL LITERATURE

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Abstract

This paper critically reviews the literature on embodied carbon in trade and evaluates our present empirical understanding of these flows. A careful comparison of quantitative results from this literature exposes significant inconsistencies. For instance, estimates for emission embodied in world trade in 2004 range between 4.4 Gt and 6.2 Gt CO2, the difference corresponding to around half of Europe's annual emissions. A few consistent themes do nevertheless emerge from the literature. Most importantly, emissions in trade constitute a large and growing share of global emissions. Uncertainty about country-level embodied emissions remains large, however, which presents severe limitations for the practical application of embodied carbon principles in climate policy.

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