Specialization patterns and reduction of CO2 emissions: An empirical investigation of environmental preservation and economic efficiency

We study the effects that different degrees of specialization in the production of the global net output of a group of countries might have on the emissions of CO2. The analysis is based on the Sraffian notion of subsystems, which allows us to study what the input–output table of a country would look like under different hypotheses on the allocation of the available resources. We use the WIOD input–output tables and the related environmental accounts for 1995–2009. We show that the environmental benefits deriving from appropriate specialization patterns could be substantial. Moreover, our results suggest that CO2 reduction is not necessarily detrimental to economic activity. On the contrary, with the appropriate exploitation of suitable patterns of specialization, CO2 reduction and GDP growth may even be pursued jointly.