Trade and the Environment: Assessing the Carbon Footprint of Global Supply Chains

Abstract

Global trade has become a fundamental engine for economic development and international cooperation. However, as supply chains extend across borders, their environmental impact—especially their carbon footprint—has intensified. This paper investigates the relationship between international trade and carbon emissions, focusing on the environmental consequences embedded within global supply chains. It assesses the carbon intensity of different stages of trade logistics, from production and transportation to warehousing and consumption. Using empirical data from major global trade hubs and emission modeling techniques such as Environmentally Extended Input-Output (EEIO) analysis, the study quantifies the carbon emissions associated with supply chains in diverse industries. The research highlights how current trade practices, particularly in sectors like electronics, apparel, and agriculture, contribute significantly to greenhouse gas emissions. Furthermore, it evaluates policy mechanisms, such as carbon labeling, carbon border taxes, and green logistics, which could potentially mitigate these environmental impacts. By offering a thorough analysis of trade-induced emissions, the paper contributes to the growing discourse on aligning economic globalization with environmental sustainability.