Pollution haven or pollution halo? A Re-evaluation on the role of multinational enterprises in global CO2 emissions

By Yuwan Duan, Xuemei Jiang. 2021

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Abstract We employed an inter-country Inter-industry Input-Output database that distinguishes the activities of Multinational Enterprises (MNEs), to re-evaluate the role of MNEs in global CO2 emissions against the risks of a reversal in economic globalization. We traced the generations of CO2 emissions along global production chains by both MNEs and non-MNEs, and simulated the global CO2 emissions under anti-globalization scenarios with the reflow of MNEs. The results show that the global supply chain-based emission intensities of MNEs are higher than that of non-MNEs, while the direct intensities of MNEs are lower than that of non-MNEs. Under the scenario of anti-globalization that the manufacturing productions of MNEs were replaced by the domestic counterparts in the host economies (Scenario I) or the domestic firms in the MNEs' parent economies (Scenario II), the global CO2 emissions in 2016 would be reduced by respective 278 Mt. (−3.17%) and 1170 Mt. (−13.34%). From the perspective along the entire supply chains, the MNEs led to pollution haven effects in both high-income and low-income economies. Therefore, the rise of anti-globalization may temporarily curb the increasing trend of global CO2 emissions in near future. However, given the degree of influences, long-term technological breakthroughs are still required, to ensure 2020 is the year that global CO2 emissions really peak.

Subfields: Economics and Econometrics, Environmental Engineering

View Paper: https://www.semanticscholar.org/paper/81a534fe6778cbddda11209c9197fb4918d61be0