Effects of Globalisation on Carbon Footprints of Products.

Outsourcing of production from the industrialised countries to the newly industrialised economies holds the potential to increase wealth in both places, but what are the environmental costs of the globalised manufacturing systems? This paper looks into the changes in carbon footprint of manufactured products when production is moved from United Kingdom or Denmark to China and uses environmental input-output analysis to calculate the carbon footprint in the bilateral trade between these countries. The results show that differences between the European and Chinese production systems can lead to substantial increases in the carbon footprint of the traded products, even without including the CO2 emissions from the associated transportation.