Global Value Chains and Climate: Decomposition of CO₂ Emissions in Latin American Economies

DOI

10.2991/978-2-38476-466-2_2How to use a DOI?

Keywords

Global value chains participation; CO2 emissions; Latin America; Environmental Kuznets; pollution decomposition

Abstract

This paper investigates the relationship between global value chain (GVC) participation and CO2 emissions in seven Latin American countries Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, and Peru within the framework of Sustainable Development Goal 13 (Climate Action). Using panel data for the period 1995-2020, the analysis explores the environmental impact of GVC integration by decomposing the pollution effects into scale, technique and composition. The results reveal that overall GVC participation significantly increases CO2 emissions, particularly through forward linkages, while backward linkages yield mixed effects. The technique effect shows a negative correlation with emissions, indicating that technological advancements mitigate environmental damage, whereas the scale effect exacerbates pollution. Furthermore, FDI is found to contribute to higher emissions, consistent with the pollution haven hypothesis. Strong governance, represented by the rule of law, is critical in reducing emissions, while inflation has a positive effect on pollution. These findings suggest that Latin American countries face significant trade-offs between economic growth and environmental sustainability. Suggesting some policy recommendations at promoting cleaner GVC participation, enhancing technological innovation, and strengthening environmental governance to achieve sustainable development.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Karen Giselle Gomez
AU  - Amer Ma’en Hussein Hussein
PY  - 2025
DA  - 2025/09/15
TI  - Global Value Chains and Climate: Decomposition of CO₂ Emissions in Latin American Economies
BT  - Proceedings of the 7th International Conference on Information Technology, Engineering, and Business Applications (ICIBA) and 3rd Social Science & Economic International Conference (SOSEIC 2024)
PB  - Atlantis Press
SP  - 4
EP  - 19
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-466-2_2
DO  - 10.2991/978-2-38476-466-2_2
ID  - Gomez2025
ER  -