Resource-Based Industries and CO2 Emissions Embedded in Value Chains: A Regional Analysis for Selected Countries in Latin America

Abstract

This paper analyzes the relative content of CO2 emissions embedded in regional supply chains in four different countries in Latin America: Brazil, Chile, Colombia, and Mexico. We estimate both the trade in value-added (TiVA) and the CO2 content embedded in interregional and foreign exports, mapping the relative intensity of CO2 emission levels on value chains. For that, we applied an inter-regional input-output model to determine the interplay between the CO2 emission embedded in goods of resource-based industries and their linkages with other economic industries, revealing a map of CO2 emissions on trade in value-added trade from a subnational dimension. The main result reveals an interregional dependence, indicating a higher level of embedded CO2 on value-added in each regional economy for resource-based industries, usually intense in CO2 emissions. This finding has considerable implications for the sustainable development goals of these subnational areas, as the spatial concentration of production leads to an unbalanced regional capacity for promoting reductions in CO2 emissions along with value chains.