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This paper analyses carbon emissions and value-added embodied in trade between two large developed countries, South Korea and the United States, during 2000-2014. Using multi-regional input-output (MRIO) tables, our analysis reveals that carbon emissions and value-added embodied in exports grew by 19% and 101% for South Korea but shrank by 43% and 7% for the United States. As a result, South Korea experienced a 40% increase in net carbon exports and 243% increase in net valueadded exports. At the industry level, the primary drivers of changes in carbon exports were electricity and basic materials. The majority of industries in witnessed improvements in carbon intensities suggesting improved environmental efficiency. While both countries achieved a decoupling of carbon emissions from value-added exports, substantial year-to-year and sectoral variations were observed. Finally, structural decomposition analysis indicates that domestic supply-side factors played a role in decreasing emissions whereas foreign demand-side factors contributed to emissions increases. In line with the main findings, various implications for policy and future research are discussed. [ABSTRACT FROM AUTHOR]

Growing international trade is likely to become a major obstacle in reducing carbon emissions. Research that estimates trade-related emissions and analyzes the sources will be important to overcoming this obstacle. With this in mind, the current paper investigates carbon emissions embodied in South Korea's trade during 2000–2014. Using multi-regional input-output analysis, we find large increases in emissions embodied in exports (production-based emissions) and imports (consumption-based emissions) which drove increases in Korean emissions. Over time, Korea's net carbon exports grew alongside its net value-added exports, implying a greater trade-off between the environmental costs and economic benefits of trade. However, emission intensities of exports and imports both fell which suggests improvements in emission efficiencies at home and abroad. Analysis of bilateral trade shows that growth in trade with China accounted for the largest share of increases in Korea's embodied emissions. Analysis at the sectoral level shows high levels of emissions relative to value added in basic materials and transportation services but low levels of emissions relative to value added in electronic and mechanical equipment and transportation equipment. Lastly, structural decomposition analysis indicates that improvements in emission intensities limited growth in emissions, while rising levels of final demand expanded growth in emissions. As the first extensive study to analyze the drivers of changes in Korea's carbon emissions embodied in multilateral exports and imports, this paper recommends various abatement policies to effectively reduce emissions. [Display omitted] • CO 2 emissions embodied in Korea's trade during 2000–2014 were estimated. • Production-based and consumption-based CO 2 emissions were measured. • Multi-regional input-output and structural decomposition methods were applied. • Korea's net CO 2 emissions exports increased considerably during 2007–2014. • The scale of final demand contributed most to the rise in Korea's emissions. [ABSTRACT FROM AUTHOR]