Embodied Carbon Emissions Accounting and Driving Factor Analysis in International Services Trade

Services trade is becoming increasingly important for the global economy, contributing 20% to the global trade in 2019. Service industries are generally considered ‘‘green’’ because of their marginal direct emissions. However, the emission triggered in the supply chain are huge and have not been paid enough attention to. Given the growth of services trade, it is necessary to analyze how changes in both direct and indirect emissions are embodied in the services trade and, in particular, what the drivers behind that change are. 

Dr. Jing Meng, Professor D’Maris Coffman and Professor Dabo Guan together with their collaborators in China filled the gap and found the emissions embodied in services trade have increased at an average annual growth rate of +1.34% and accounted for almost 30% of total global trade emissions from 2010 to 2018. This is mainly driven by increased trade volume and changing trade structure. Services trade in the Global South has a higher growth rate and emission intensity. They further analyzed the trade pattern of the Global South and divided it into three main trade patterns.

Dr Jing Meng commented:

"Service trade is not as green as we thought because of the emissions triggered in the supply chain. The service trade (e.g. financial service) patterns are different across regions and should be paid more attention to."

This research, titled "Drivers of fluidizing embedded emissions in international services trade" is now published online on One Earth. 

Read the full article.