International trade has strong impacts on climate change. Trade can act as a strong factor for some countries to transfer their own Green House Gas (GHG) emissions to their trade partners. In the last decade, BRIC countries (Brazil, Russia, India and China) have witnessed the highest economic growth rates as well as the fastest expansion in trade. Within the same time span they also emerged as the world’s largest GHG emitting countries. Now, the question arises, is this increase in pollution in BRIC countries due to international trade? Are these countries becoming so called global “pollution havens”? In this article, I use the single region input-output analysis model to assess the CO2 emissions embodied in trade in BRIC countries, and also identify if there are carbon leakages in these countries. The result shows that due to its massive export of manufacturing products, China has emitted a huge amount of CO2. Russia also has a big imbalance on trade embodied CO2 emission mainly due to its massive export of energy products. However, the paper finds that the increase in Brazil’s CO2 emissions is not related to trade but to land-use and agriculture and India actually benefits from the trade flow, environmentally.

Laike Yang

Published in Berlin Working Papers on Money, Finance, Trade and Development, May 2012